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  • March 5, 2009 04:04 PM EST by Cody Willard

    Don't Panic Now That We're Here: Look for DJIA 7500 Before DJIA 6000

    Long-time and even new readers know that I've been bearish and have taken my price range on the DJIA from 7k-9500 down to 6k-8k. Well, the good news is that we're closer to the bottom part of that trading range right now.

    I am not going to call a bottom today. Or ever, frankly. I don't even like the idea of trying to "catch the bottom" of the market.

    And for years when I used to write a trading blog every single day while running a hedge fund, I used to talk about how important it was to never be contrarian just for the sake of being different or ironic.

    But when everybody in the green room -- and I mean EVERYONE from the hair artists to the janitor to the security guards to the guests and the reporters -- is bearish and talking about the end of the economy and throwing out DJIA 4k targets as if they're fait accompli...

    Well, guys, it's probably time to take the other side of the trade or at least to stop being short/bearish. The fact is that some of the biggest rallies come in bear markets. And we're certainly in a bear market.

    The economic news is horrible. The earnings news is horrible. I wasn't joking when I screamed last that there was absolutely no way that GE would keep their dividend this year back when Immelt said it was safe last month. It wasn't. But that's also now reality and that reality is now priced into the market.

    I still wouldn't touch GE or any other company that's become dependent upon welfare infusions or welfare guarantees from TARP, the Fed, Treasury, TALF, etc.

    But as I proposed to Ron Paul, Peter Schiff and Judge Napolitano on Strategy Room yesterday -- we might want to consider the idea that all these trillions of worthless dollars that the government is injecting into the economy might actually provide some fleeting, temporary, illusory cushion of economic activity. It won't change the on going real estate crash that's finally just arrived in NYC and elsewhere. But in places like California where real estate is trading at less than half of what it was a couple years ago, the pricing isn't awful anymore.

    Whatever the reasons, the economy and markets will have counter trends against the ongoing bigger bear market and economic downturn that we're locked into. It's ridiculous to think that the US economy "should" bounce back to positive growth in 2010, simply because "it usually does". But we might get a few quarters in which the actual economic and earnings results aren't going to be quite as bad as people are expecting.

    The time to freak out was at DJIA 14k and the millenials on Happy Hour were telling us that they could and should demand nap time in their contracts because there's so much more demand for their labor than supply (true story!)

    Don't freak out now that we're here near my DJIA 6k target. If anything, catch your breath. I'll go out on a limb here and say that we're more likely to see DJIA rally 15-20% before it falls another 10% from the 6600 level as I write. Remember that just last week DJIA was close to 7500.

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john paul

Dont listen to this idiot. The Djia is going to Zero just like the bibles says, and it is going to happen in the next 6 months.

March 7, 2009 at 12:35 pm

Rockin Bakken

Go lower Cody....5,000 to 5,500 DJIA. I've lost 12 years of wealth building. I was always scolded in school for not sharing. I have'nt changed.

March 6, 2009 at 2:04 pm

nobama

Cody you are the man. As far as Akmed Amad, lay off the left wing loony lemon kool-aid. With Pelosi, Reid, Dodd and back door Barney controlling congress the past few years there is plenty of blame to go around. Whatever happened to accountability anyways. Corporations as well as individuals should have the face the consequences for their actions. This socialist path we are traveling on will produce dire results in the future. We need to return to the fundamentals which made this country great. Ahmed I would suggest a litte conservative cola or at least some moderate melon kool-aid in the future

March 6, 2009 at 10:43 am

Randy in Newburgh

I would agree with you somewhat. I don't think you are grasping the full impact on what is taking place in the trenches. Every manufacturing plant that I travel to is now operating at 30 to 40% of what is was 6 months ago. This is not a recession but will be a full blown depression. Most companies are holding onto extra labor for now because they don't want to let the good people go. Eventually, I mean within 6 months, if things don't change, companies will be forced to lay off even more workers than they are now. Everyone needs to start thinking about literal servival. How are you going to feed yourself and family if you don't have a job for 2 to 5 years.

March 6, 2009 at 9:19 am

Playin Possum

Crash market, crash!

March 5, 2009 at 11:52 pm

Playin Possum

T_r_a_d_e_r_s are t_r_a_i_t_o_r_s!

March 5, 2009 at 11:45 pm

Playin Possum

The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US! The gipper wrecked the US!

March 5, 2009 at 11:43 pm

Playin Possum

And again Fox won't publish the truth. Fox is the enemy. Bring back the fairness doctrine and bankrupt them.

March 5, 2009 at 11:21 pm

anna amed

Bush, Dicki and Rumsfield started the war, and pump in $ Trillions. Bush could easily send some commandos (as shown in Hollywood movies) and finish the business quietly. He killed more people than Sadam Hussain and looted the $ Billions. Bush mission to bankrupt America is almost accomplished. Now we are suffering this broken economy and Mr. Obama is having couple of Jokers, Gaithner and Bernake. They are pump in $ trillions in CITI and companies that are going to Bankrupt eventually. A caveman can do a better job than Bernake and Gaithner are doing. Mr. Obama gets some better and genius people, not losers like BUSH (POC). What a shame!!!

March 5, 2009 at 9:17 pm

kevinincolumbus

Now for my rant !!!!!!!!!! This means we are broke!! no ifs ands or butts (intended) The US gov is acting like the management of GM we just need a bridge loan of 10 times what we can possibly make in our life times to make it through the next year or so till times are better that is a big huge joke and a pipe dream. So if I lose my job i should get a loan for my entire pay for the next 2 years and spend more money then I used to so that the economy will benefit and produce a job for me in the future. That is the logic they wish to use but some how i doubt a bank would make that loan. It is actually past the point of wake up and on the the reality of what do we do to make the best of a bad situation.

March 5, 2009 at 9:14 pm

anna amed

Bush, Dicki and Rumsfield started the war, and pump in $ Trillions. Bush could easily sent some commandos (as shown in Holloywood movies) and finish the business quietly. He killed more people than Sadam Hussain and looted the $ Billions. Bush mission to bankrupt America is almost accomplished. Now we are suffering this broken economy and Mr. Obama is having couple of Jokers, Gaithner and Bernake. They are pump in $ trillions in CITI and companies that are going to Bankrupt eventually. A caveman can do a better job than Bernake and Gaithner are doing. Mr. Obama get some better and genius people, not losers like BUSH(POC) What a shame!!!

March 5, 2009 at 9:12 pm

Listening In Texas

Not sure I can agree with your assessment this time. Everytime Obama opens his mouth; the stocks drop 100+ each DAY! I'm sure you are apparently more of an optomist here; but listening to stupidity was never one of my strong point. I have exceptionally little tolerance for Obewan in the office! His policies are NOTHING BUT DESTRUCTIVE! There are simply not many positives at the moment. My prediction -- stocks will plow through the 6,000 down to around 5,200 and if he keeps running his mouth; we are looking closer to 4,000 or even lower. Talk about kill the economy -- what can he do more to do so? Please don't say so; else it may be implemented!! Government to the RESCUE!! This is all that is being setup! NEVER has it worked and NEVER will it!

March 5, 2009 at 7:48 pm

adam

I will take that bet.

March 5, 2009 at 5:22 pm

D-Town Douglas

Code, I love the way you think Bro'!! But how about the control the Illuminati have when Mr. Obama says "don't worry about the market - don't watch it" - and all it does is nose dives - don't you think that the Illuminati are in the "I told you so" mode and will not allow Washington/Obama to dictate its market? Do you know that the "I told you so's" are over and that the Illumiinati will allow a rally when Washington/Obama beleive that the market has no true function in their plans - only to be controlled?? Keep flyin'em out there our Brother!!!

March 5, 2009 at 5:20 pm

Pamela

When the polls start to show a significant decrease in confidence in Obama's socialism then a bottom may be near. When Americans wake up there will be hope. That hasn't happened so there is nothing to turn around this free fall. Socialized health care is now being pushed through in crisis mode as the "Number One Threat to the Economy". An Energy crisis is next with more green socialist legislation to follow. Corporate America is being demonized much like the Jews before WW2 when a popular and charismatic Hitler was elected by promising to take wealth from those who don't deserve it and give it to the poor population. Why should loans be paid back to greedy corrupt banks, er, ah Jews. Why should peasants have to work for wealthy French aristocrats????? Off with their heads!!!!!

March 5, 2009 at 4:57 pm

frank chatham

Cody, Check out the Indie Bands' Videos @ http://www.bebad.us Implement the following immediately address the financial crisis and the USofA GDP will be at least 5% grow per year for the foreseeable future... 1) Repeal Sarbanes-Oxley 2) Suspend Federal Payroll Taxes for 2 years 3) Suspend Capital Gain Taxes for 2 years 4) Suspend Corporate Taxes for 2 years 5) Return to Mar to Market Account 6) Make the Reagan Tax cuts permanent At the end of 2 years, let Congress decide which one(s) to make permanent. These are simply a summary of ideas that make the most common sense of all the ideals that have been floated. This would make the majority of most banks very solvent. Resolve the credit crisis. Encourage Americans to increase spending and savings. Confidence would be restored on Wall Street and the DJI would return to at least 10,000 with months NOT years. This also would give Congress plenty of time to debate eliminating the IRS and moving the US Fed to a point-of-sales taxes (except food & drugs) fairtax.org !!

March 5, 2009 at 4:32 pm

about this blog

  • Cody Willard is an anchor on the FOX Business Network. Willard is also the principal of an investment management company. He was a long-time featured columnist for the Financial Times and TheStreet.com as well as a regular featured economist and stock picker on CNBC's ''Kudlow & Company."

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