Stock Market Update 03 August 2008

A routine update for the week ending Fri, Aug 01.

A very turbulent week on the markets but in the end very little change from my last blog entry. For the week the Dow Jones World Index lost 0.56% with no clear direction as to which way it wants to go from here.



I am still of the view we will see a good bear market rally very soon followed by a large drop into the fall (taking us below our most recent lows). I will wait for the technicals to let me know when it is right to enter to try to take advantage of the bear market rally.

I am generally not an "end of the world", "doomsday" type of investor; most who publish these sorts of views tend to be one's who want to stand out from the crowd to sell you their newsletter service (and tend to not make money in the markets).

The markets have generally been quite orderly and well behaved for several decades and there has been very little technical proof that "this time it is different". However, I think it is always wise to prepare for the worst and, given the dual crisis I spoke about previous that we are now facing (credit crunch/financial distress combined with a U.S. housing collapse), I am always on the lookout for indicators that tell me that in fact this time it is different.

In the course of doing some recent reading, I came across an article that I feel is deserving of attention. I was unable to put it in as a link so you will have to cut and paste the address to your browser to view it but it is very thought provoking and has me watching my indicators closely.


http://www.contraryinvestor.com/mo.htm


I would highly suggest you read it and think about how you are personally positioned should the "generational event" comes to pass this time around.