The Market Bottom

Will 6400 on the Dow Jones be the bottom of this particular bear market?

Some technicians are speculating that 6400 might be the bottom of this bear market, because it is a Fibonacci number relative to the lows of 1987 and the peak of 2007.

WD Gann used to say that the market would square it's range. That means that there should also be a relationship between the time and price of the market's highs and lows. When and where would he say that the market low will be in this bear market?

Time-wise, there will probably be a political agenda to the market low. If I was President Obama, I would want everything to look as bad as possible right now, so that in 4 years when I'm up for reelection, things will look much better. I'd say that the markets are set up for just such a scenario.

Fundamentally, the markets could be priced just about anywhere. Putting an optimistic spin on potential earnings, there is the distinct possibility that the market is significantly undervalued. As the economy improves, 14000 on the DJIA could be reached relatively quickly.

If the current administration manages this properly, the capital gains on the taxpayer investments into corporate America should help balance the budget, allowing for some principal repayment.

So where is the market bottom and will the technicians be right?

6400 is probably a reasonable guess. The self-fulfilling prophecies of aggregate psychology could allow a bottom to be put in place at 6400 on the DJIA.