Despite the worsening global economy, the Dow Jones Industrials soared 382 percent from a low of 40.56 in July 1932 to a high of 195.59 in March 1937.
All in the middle of the worst depression in our nation’s history!
And all of my indictors and studies tell me that the Dow’s 2009 crash low of 6,495 is tantamount to the 1929 crash low in the Dow.
And a similar 382 percent gain from that low would put the Dow Industrials just north of 31,000.
Thing is, Dow 31,000 is my minimum target. Why?
Because unlike the 1932 to 1937 period when it was primarily the governments and banking system of Europe that were going down the drain, this time around the governments and banking system of the U.S. and Japan will also collapse, adding fuel to the fire as capital stampedes away from the public sector and from banks in droves … and into the welcoming arms of commodities and stocks.
What about the correction we’re now seeing in the stock market, and where do the commodity markets stand right now as well?
The pullback we’re seeing in the Dow was way overdue and is merely a healthy correction. It’s the pullback I have been expecting. There is no, I repeat, no risk of a crash.
The maximum downside in the Dow, according to my models, is roughly 13,623.
If it gets that low, be ready to back up the truck and buy. These days the Dow is at about 15,200.
As for commodities, they are now in the final phase of their three-year correction. We should see final bottoms come into play in everything from gold to oil to rice by January. Then commodities will begin a moon shot higher, with gold leading the way.
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