Stock Market Forecast For 2009. Which Penny stock you must pick?

The market dropped over 40% since it reached the top in October 2007. Does this mean the correction is over and we will now look for a new bull market to happen in 2009? Even the 1987 crash now seems like a blip on a bubble formation. To paraphrase the SP 5 hundred index rose by 1,500% in eighteen years. Starting in two thousand we had a pointy 3 year correction that cut the gains over the last eighteen years just about in half as the low on the SP five hundred index was 800.58. Then the market moved to a debatable new high at 1,561.80 over the following 4 years.

So to summarize we formed an ominous double top formation over a period of 7 years. Since that time in 2008 the market has started moving down again. It is not nice to indicate how this sort of pattern frequently plays out, but here it is. The initial real rebound would be predicted down in the eight hundred area where the last correction finished. And in the second part of 2008 that's exactly what is happening.

But I would not expect it to hold there for long. After the subsequent real hold area would be in the 450 area, but there is no guarantee it'll even stop there.

Even if it does we are presumably in a depression or at least a painful recession. Remember this is an index of five hundred stocks and a lot of them have earnings for the moment so I would not expect it to be as heavy as some of the dot com stocks in 2k that were brought to the moon on just an outlook of takings before the bubble burst. As an example, YHOO topped out at roughly 2 hundred and before it being over the stock was trading below 10 two years on.

If we're going into an especially major recession or depression in the economy tons of these firms will have negative takings to paraphrase they will be losing cash. I think the more likely eventuality is the market moves lower and at some point in 2009 the SP 5 hundred index dips below five hundred. At that point I believe the possibilities still favor a major market and depression regardless of their brave tries to stop this appalling eventuality from unfolding. Only time will tell if they're going to achieve success, but I have my doubts unless and until I see inspiring signs in the economy. Until then the market is on shaky ground and subject to sudden and violent down days which will erase all those making a scheme to pick the bottom in this market at this time before the final bottom is reached at noticeably lower levels.

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