Tags: Richard | Suttmeier | Dow | Plunge | 25 | Percent

Suttmeier: Dow Flirting With Plunge of Nearly 25 Percent

Monday, 12 Jul 2010 01:17 PM

The Dow Jones industrial average is poised to plunge nearly 25 percent, said Richard Suttmeier, chief market strategist at ValuEngine.com.

He has been predicting that the Dow will reach 8,500 since March 10 and is still holding onto that forecast. Suttmeier told Yahoo Finance TechTicker that he believes the market could decline even further.

If the market continues to dip, the Dow could drop to 7,800, but wind up at 10,560 in the second half of 2010, he added. The Dow recently traded at about 10,190 and a drop to 7,800 would be a fall of more than 23 percent from its current level.

Suttmeier said he is “not looking for an immediate move to 8,500” and predicts there could be “trading opportunities from both sides of the equation.”

He advises that investors buy and trade their holdings. For instance, he suggests shedding gold and oil because of their strength and going long on the euro.

James Altucher of Formula Capital believes the market is headed for a rebound.

“The S&P 500 should go back to all-time highs in the next few years. It’s a scary world but stocks are very cheap, dividends are nice and high, earnings are high [and] P/E ratios are the lowest ever,” he said.

Altucher said stocks are a good buy since they are inexpensive, according to his recent Wall Street Journal column.

“Consensus among analysts for S&P earnings for 2011 is $94. With the S&P near 1,050 that puts us barely above a multiple of 11 times earnings with the historical average somewhere near 15,” he said.

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The Dow Jones industrial average is poised to plunge nearly 25 percent, said Richard Suttmeier, chief market strategist at ValuEngine.com. He has been predicting that the Dow will reach 8,500 since March 10 and is still holding onto that forecast. Suttmeier told Yahoo...
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2010-17-12
Monday, 12 Jul 2010 01:17 PM
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