Thoughts from a talk I had with Joe Ross about the economy

by Tom Nunamaker on October 23, 2009

I just had a nice phone call with my friend Joe Ross of Trading Educators (website and blog). Joe thinks the Industrials are headed to 4000. Look at this stock chart and see if it looks similar to our current market:

Online Stock Trading Guide

2008-2009-stock-chart

Looking at those two charts, if history does repeat itself, we’re likely in for a DOW of 4000-5000 as Joe predicts.

We also discussed M3 and a really nice website that has lots of great economic data:

http://www.nowandfutures.com/

Scroll near the bottom and you’ll see a chart titled “Global Liquidity and Gold”. Here it is:
Gobal Liquidity and Gold

Looks like Global Liquidity is in trouble. The banks have the money but it’s not being lent or in the hands of the people. Joe figures Gold will reach the 300’s eventually. When Gold rallies, he buys some DZZ (Pro-shares double short Gold).

It’s always interesting to talk to Joe. He’s been trading for more years than most of us have been alive. I always value your thoughts Joe!

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{ 8 comments… read them below or add one }

Sheridanoptions October 23, 2009 at 6:40 pm

I had a nice talk with Joe Ross from tradingeducators about a few market related topics. See what we talked about here: http://j.mp/3GHnnb

This comment was originally posted on Twitter

Larry October 24, 2009 at 12:58 pm

Thank you very much for posting my chart and especially, for leaving the link intact. Many times I come across charts or even whole pages from my website on other sites with no link intact or credit for the source.

I will be looking over your site over the next few days to find out more about it. I always like to have a list of respectable sites to refer my readers to when the need arises.

Thanks again.

Tom Nunamaker October 25, 2009 at 7:25 am

Hi Larry,

You’re welcome! It’s nice to have resources such as yours to refer to on occasion. Perhaps we can be a guest blogger for you in the future about income option trading.

Ernst October 25, 2009 at 5:17 pm

tom – if you correlate DJI of 4000 with the SPY would that confirm my call of 2yrs ago that the SPY would be 450? 🙂

So far we are heading into that direction.

I see two thing stopping me from being correct;
– A enormous drop in the USD
– (very) Steep inflation.

If one of these come about I could see an SPY of 2000 or over and Joe prediction and mine will be seen as laughable.

Tom Nunamaker October 25, 2009 at 10:32 pm

Hi Ernst,

Joe and I did talk about the USD. Joe said all of the markets are waiting to see which direction the USD goes. It’s pretty oversold at the moment and he expects a rally. If the rally doesn’t come, it could be big trouble. For my mortgage (In Euros) sake, I hope the USD does rally 🙂

Joe thinks we’re headed for years of deflation similar to the Japan experience (The lost decade ring a bell?). We’ll see what this big economic experiment ends up in in a few years. Just keep risk management in the fore front everyone!

Larry October 26, 2009 at 7:06 am

Hi Tom,
I would welcome Sheridans Options Mentoring as a guest blogger anytime. I primarily have information on Stock Trading currently, but will be adding a section on Options Trading shortly.

BTW: I also have the view that the U.S. Dollar is at or very near a major bottom.

Rich Mackay October 26, 2009 at 7:30 am

I still use Advanced Get which uses Elliott Wave & fib. The weekly Elliott Wave, in this program, seems to be in agreement with Joe Ross’s comment. This calls for the DOW to be between 4000 & 4500 sometime around early spring. The weekly target for the S&P is around 200. All this seems a bit extreme but who knows!!!

Tom Nunamaker October 27, 2009 at 12:36 am

Rich, I was talking to another student who subscribes to an elliott wave newsletter and I think he said they are predicting DOW at 400 unless I heard him incorrectly. I think Dr. McHugh’s newsletter also is expecting a massive sell off. The thing to remember is no one knows where the market will go, so control what you can … your risk management. Be very prudent with these types of predictions. Consider putting extra longs on your position for protective puroses.

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