By Tara Lachapelle and Nikolaj Gammeltoft

Sept. 27 (Bloomberg) -- The Dow Jones Industrial Average will surge to 38,820 in an eight-year “super boom” beginning in 2017, according to Jeffrey A. Hirsch, editor in chief of the “Stock Trader’s Almanac.”

“All previous major economic booms and secular bull markets were driven by peace, inflation from war and crisis spending, and ubiquitous enabling technologies that created major cultural paradigm shifts and sustained prosperity,” he wrote in a press release sent with the 44th edition of the book.

Hirsch’s forecast comes more than a decade after James K. Glassman and Kevin A. Hassett predicted the Dow would rise to 36,000 by 2005 in “Dow 36,000,” a New York Times bestseller. The 114-year-old average ended 1999 at 11,497.12 and sank as low as 7,286.27 in 2002 following the Internet bubble. The Dow then jumped to a record 14,164.53 in 2007 and fell to 6,547.05 in March 2009 after the worst financial crisis since the 1930s.

“He’s got some crazy number on there,” said Frank Ingarra, a Stamford, Connecticut-based money manager at Hennessy Advisors Inc., which oversees about $900 million. “We’ve had probably one of the worst 10-year periods in history, and I think there’s just too much overhang with the government for it to get to those numbers.”

259% Surge

The Dow closed today at 10,812.04, meaning it must gain 259 percent, or about 8.9 percent annually in 15 years, to reach Hirsch’s projection. It has lost an average of about 1.3 percent a year since the end of 1999. The Standard & Poor’s 500 Index slipped 0.9 percent a year including dividends between 1999 and 2009, the first negative return for a decade since data began in 1927, according to S&P.

The withdrawal of U.S. troops from Iraq and Afghanistan and inflation caused by the wars and spending to end the financial crisis will help push the Dow higher, Jeffrey Hirsch said in the statement. Advances in energy technology or biotechnology may also help spur the rally between 2017 and 2025, he said.

“I can’t throw a dart that far,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “It’s too unknowable with regard to the things that would set up that kind of move.”

The “Stock Trader’s Almanac,” first published by Hirsch’s father Yale Hirsch in 1967, is known for revealing seasonal patterns in equity market returns. The “Best Six Months” strategy shows that since 1950, investors made the most money owning shares of Dow companies between Nov. 1 and April 30 and avoiding them the rest of the year. The book includes data showing the third year of U.S. presidents’ terms -- such as 2011 -- produce the best returns.

Jeremy Siegel

Glassman and Hassett based their forecast on work by Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School, who had noted that since the early 1800s, equities had never offered a negative return, after inflation, if held for 17 years or more. To the authors, that meant stocks were a safe bet for long-term investors if they could handle short-run volatility.

Glassman served as President George W. Bush’s undersecretary of state for public diplomacy and is now executive director of the George W. Bush Institute. Hassett is the director of economic-policy studies at the Washington-based American Enterprise Institute and a Bloomberg News columnist.

The Dow, created on May 26, 1896, by Wall Street Journal co-founder Charles Dow, was initially valued at 40.94 and included American Cotton Oil, Chicago Gas, Distilling & Cattle Feeding, National Lead and Tennessee Coal & Iron. General Electric Co. is the only remaining original member, though it wasn’t in the average for nine years starting in 1898.

The Dow surpassed 100 in 1906 and reached 1,000 in 1972. It topped 5,000 in 1995 after jumping 1,000 points in nine months. It was made up of 12 stocks initially, increased to 20 in 1916 and expanded to 30 in 1928. The average’s biggest single-day point loss was 777.68, or 7 percent, on Sept. 29, 2008.

EXACTLY WHAT I FEEL..REMEMBER I SAY BASED ON HANGSENG CHARTS,HANGSENG TO REACH 32K IN END 2011 TO 2012 THEN A DROP OF 50% TO 2015-2016,THEN A SUPER RALLY IN 2016,2017!!!

REMEMBER WHAT I SAID???
CASE SHILLER HOME PRICE INDEX COULD FALL BACK TO YEAR 2000LEVELS AS THE JOBLESS RATE IN US STILL VERY HIGH

BUT ITS TIME TO HAVE THE US STOCK MARKET CHEONG UP!!!

AS I SAID U DONT NEED TO USE REAL MONEY TO PUSH UP A STOCK MARKET...IF U UNDERSTAND WHAT I MEAN...

ITS NOT ABOUT OBAMA QUANT EASING 2
ITS NOT ABOUT MIDTERM ELECTIONS

STOP LISTENING TO MEDIA NOISE

ITS ALL ABOUT ONE UP,THE OTHER DOWN





Home Price Double Dip Begins
Published: Wednesday, 15 Sep 2010 | 11:31 AM ET Text Size By: Diana Olick
CNBC Real Estate Reporter
DiggBuzz FacebookTwitter More Share


The trouble with many of the "indicators" we report is that some are pretty current and others are severely lagging. Home sales are generally the former and home prices the latter.

That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.

Well we're here.

Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."

And there's the rub.

Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.


"Sellers on the market today have cut $29 billion off their collective home equity."

Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.

We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."


Mortgages


30 yr fixed 4.50% 4.67%
30 yr fixed jumbo 5.36% 5.53%
15 yr fixed 3.88% 4.24%
15 yr fixed jumbo 4.80% 5.05%
5/1 ARM 3.37% 3.29%
5/1 jumbo ARM 4.03% 3.52%

Find personalized rates:


Bankrate.com


They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.

Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.

why sp will break 1130 on the upside???

because silver just cheong up more than gold cheong up...

goldsilver ratio is a very crucial indicator...

sp500 has rebounded from 666 to today sept 14 1120,70 percent and goldsilver ratio has dropped 30plus percent from 90s in mar 2009.
assuming this ratio holds constant,

sp500 has 450 more points to go up to 1570,alltime highs in year 2000 and 2007
how much can goldsilver ratio fall?another 15 to 20 percent from current sept 2010 60s to 50,the crucial level in chart...

THREE SCENARIOS:
CASE ONE:if gold FALLS while silver rises, then sp500 will hit 1570 faster,hsi hit 32K by mar 2011

CASE2:IF GOLD FLAT WHILE SILVER RISES:then my target will be hit on sept 2011

CASE3:if gold rises and silver rises,then MAY drag to mar2012

http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

please download the hangseng chart from 1986 to 2010..

its trading in uptrend channel...
HERE IS THE ARITHMETRIC TREND

TIME PERIOD 1:
jan 1994 to jan 1995,hangseng drop for 1 year
jan 1995 to july 1997,hangseng up for 2.5 years

difference:1.5years

TIME PERIOD 2:
AUG 1997 TO AUG 1998:HANGSENG DROP FOR 1 YEAR
aug 1998 to 2000 aug,hangseng up for 2 years

difference:1year

TIME PERIOD 3:
aug 2000 to apr 2003:hangseng down for approx 2.5years
apr 2003 to oct 2007:hangseng up for 4.5years

difference:2 years

NOW:2007 nov to 2009 march:hangseng down for 1.5years
mar2009 to...??hangseng up for ???

the norm is u add 1 to 2 years to the down years from the hangseng bottom to get the expected time line and the target

HENCE I CONCLUDE: SELL HANGSENG IF U SEE
1.NEAR 32K ON 2011 SEPT
2.NEAR 32K ON 2012 MARCH
3.NEAR 32K ON 2012SEPT
4.OR ANY VALUES GREATER THAN 32K ON ANY OF THESE DATES...

SEE WHETHER IM CORRECT IN 2012

let us do the evaluation:

from the US HOUSING AND STOCK MARKET CHARTS, A AND B

SCENARIO 1.the us stckmarket MAY dangle in this consolidation band for another 10 years from 2010 to 2020 with us housing market to the downside to 2000levels.

we see that the rest in the stock market is TWENTY YEARS, namely1930 to 1950 and 1960 to 1980 roughly.and the us housing market is the MAIN CULPRIT in 2007, the rest in the us house market is fourty years, namely 1900 to 1940s hovering on the 5 line,even the GREAT DEPRESSION IN THE STOCK MARKET in 1930s cant bring the housing market in us to go below the 5 line,and didnt erase ALL gains from 1900 to 1930s.THE US STCK MARKET is the cause of 1930s depression, hence u see a return to 1900s levels in 1930s.so this tells us FURTHER DOWNSIDE IN THE US HOUSING MARKET IF WE SUPERIMPOSE THE HOUSING TO THE STOCKMARKET CHARTS IN 1930S as 2007 was caused by the US subprime.

SCENARIO2:SINCE subprime was us housing caused,and not the us stockmarket, hence it also suggests the opposite of 1930s that us stockmarket to break out UPWARDS of the band MUCH EARLIER than the us housing market.we can see that the us housing market broke off in 1940s when the us stckmkt hover in the band to 1950s.

so which scenario is MORE LIKELY to happen?we look at signs from us and other parts of the world.

fact 1. look at the hangseng charts.even with us subprime hangseng is unable to go below the uptrend channel from 1986.a TWENTY FIVE YEAR CHANNEL!!!and the hangseng level now in 2010 exceeds that of 1997,sugggesting a cheong to above 32K in the hangseng to about 36K!!(draw a diagonal straight trendline connecting highs)

BUT the HONGKONG HOUSING MARKET (chart C) was unable to go above 1997 highs for the smaller flats,other than GCBs,it was only the GCBs that return to higher than 1997 highs,suggesting EVEN WITH INTEREST RATES AT RECORD LEVELS, AND HKD SUPER LOW NOW, STILL UNABLE TO PUSH THE OVERALL HONGKONG HOUSING MARKET TO NEW HIGHS,suggest weakness in the HK salary terms and the HK economy.(same for singapore also)

WITH THIS HANGSENG CHART,I DEDUCE SINCE HANGSENG IS STILL WAY ABOVE 1997 LEVELS,14K VERSUS NOW 20K,HANGSNEG WILL GO RETEST THE UPTREND CHANNEL RESISTANCE AT 36K,HENCE THAT IS LIKELY TO BE CAUSED BY US STOCK MARKET GOING TO NEW HIGHS IN THE 2010 TO 2020 PERIOD--SCENARIO 2!!!!!

CHART C:

chart A

CHART B

S&P 500 PE S&P 500 Price S&P 500 Earnings S&P 500 Dividend Yield Interest Rate Inflation more ▼ multpl

Case Shiller National Home Price Index



Chart | Table | CSV |
Current Index: 131.81

January 2010

The Case Shiller Home Price Index is an indicator of U.S. housing prices nationally.

The data presented is in nominal (non-inflation-adjusted) dollars. For an inflation-adjusted (and more striking) view see Case Shiller Home Price Index, Inflation Adjusted

The steep decline in US home prices, starting near the end of 2007, is the largest drop since the great depression and the 1930s.

Data is courtesy Robert Shiller, from his book, Irrational Exuberance, and Standard and Poor's, which provides more information on the methodology for calculating the Case Shiller Home Price Idices.

Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice, and may be delayed.

Copyright © 2010 | contact@multpl.com

NOW COMPARE TO THE STOCK MARKET IN NOMINAL TERMS---chart A

we shall track from 1900s- great depression to now to see a similarity in us markets and now

time period 1:1900 to 1930:
us dow jones OUTPERFORM US PROPERTY MARKET 60 TO 300 IN DOW JONES VERSUS A 3 TO 6 PT RISE IN CASE SHILLER

TIME PERIOD 2: 1930 TO 1940
STOCK MARKET RECOVER TO 200 FROM DOWN FROM 300 TO 40.PROPERTY MARKET RECOVER MUCH LESSER THAN DOW---FROM 7 TO 4 THEN TO 5

THIS CLEARLY SHOWS EVEN IN A STOCK MARKET CRISIS 1930, THE STOCK MARKET OUTPERFORM THE PROPERTY MARKET

time period 3:1940-1950
CASE SHILLER rocket from 5 to 11, BUT DOW is flat for a decade!!!!

TIME PERIOD 4:1950-1970
CASE SHILLER IS FLAT BUT DOW UP FROM 300 TO 1000!!!

time period 5:1970-1980

DOW FLAT AT 1000!!!! BUT CASE SHILLER CHEONG 2X!!!

TIME PERIOD 6:1980-2000

GOLDEN PERIOD FOR US!!!
dow up 10 TIMES from 1k to 10k
BUT CASESHILLER UP ONLY 2X!!

TIME PERIOD7:YEAR 2000 TO 2010:
DOW STUCK AT 10K FOR A DECADE!!
BUT HOUSES ARE STILL HIGHER THAN 2000!!

WHAT ARE LESSONS LEARNT?
1.PROPERTY AND STOCK MARKET TAKE TURNS TO CHEONG UP but STOCKMARKET OUTPERFORM PROPERTY IN LONG RUN DUE TO FASTER AND BIGGER RISES CONSISTENTLY OVER A CENTURY!!

2. HANGSENG BEHAVES LIKE DOW JONES STUCK AT 20k FROM 2000 TO 2010 but snp500 is below 2000 highs of 1560 showing weakness in us general economy.dowjones having more overseas business companies eg caterpillar is at the 2k year highs

hence i conclude that hangseng will trade like the dow going back to 32K AND BREAKING IT in the next few years prob 2012 as hangseng hasnt moved much for past 10 years

hsi chart for past 20 years:
http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

hongkong property prices also at year 1997 levels BUT the difference is that hsi is above year 1997levels but hk property price at 1997highs EVEN AS INTEREST RATES KEEP ON GOING DOWN.SHOWING BUYERS FATIGUE IN PROPERTY.SUPER LOW INTEREST RATES CANT PUSH PROPERTY TO SUPER HIGHS--CHART C

from the dow jones chart,1930s was stckmkt caused ,2007 was housing caused,u superimpose 1930s stckmkt chart to be housing 2010 chart and we know us housing going to be stuck for a long time prob 20 years in the mud, whereas the dow jones with the hangseng in 2012? will break to new highs(due to MNCs,companies deriving their revenues from overseas like china,asia.)as shown by the case shiller in the 1940s

property is like an inferior good,rising much lesser and slower than the stock market overall.