Dow prediction for the next 2-3 years

I had some fun this morning and checked my psychic abilities and decided to share it with you all on where the Dow will be going over the next 2 years. I have also taken the liberty to do this as a chart of the Dow. I have drawn the 3 year downtrend line on the chart in red and used a "W" pattern to show where I see the correction going to 8,000 and then a reversal going back up in a more Bull market pattern through 2011.

The thing that makes this difficult and unscientific is that I am not using any data to predict this. I am using my intuition, which is not precise to say the least, but does see a "W" pattern in process right now. The first leg down from the high of Dow 14,000 went all the way down to 6,440. Then the leg up goes up to where we are now, about Dow 10,300. That is a move up from the bottom of 3860 points. Then use Fibonacci as a guide.

Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician Leonardo Fibonacci in the thirteenth century. retracement is created by taking two extreme points (usually a major peak and trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.

Using a Fibonacci retracement of 61.8% (because I do not see us going back and retesting the 6,440 level but do see us testing the 7,800-8,000 level again in the 1st quarter of 2010) that gets us to a retracement back to 8,000 on the Dow. That would give us a slanted "W" pattern with the second leg higher than the first and hopefully start a Bull market rally back up to 14,000 again.

This is all wishful conjecture but not totally mad. Let's assume that Christmas Retail Sales disappoints and the economy does show Consumers not spending as more continue to lose their jobs in Q1 of 2010 to an Unemployment rate of 11% or more. That would cause the stock market to pull back because the rise was based on a smooth recovery. That could get us back down to 9,000 and then add the Commercial Real Estate collapse that will come from poor retail sales. That will get us down to 7,800-8,000 level. The Government will provide another stimulus and it will atke some time to work, say about a year. That gets us to the beginning of 2012. This is just in time for the Presidential reelection of President Barack Obama. See there is a method to my madness. That will mark the end of the Bear Market.

I hope this is all clear to you now. I wouldn't bet the farm or even 1 dollar on my prediction. But I do believe something like this will occur and the Dow stock pattern will show a "W" pattern something like I have shown. The best prediction I have said to reiterate it is that we will not retest 6,440 level and that we will have a Bull Market Rally in 2 years. Check back, as this unfolds, to see. :)