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The 2007 violent sharp downward move happend on Oct.29th which signal the bear market that eventually ended and bottomed on March, 2009. From the beginning of the bear market crash to the bottom the timeframe was 17 months roughly. The pattern is pretty much the same for all markets Dow Jones, Nasdaq and S&P 500.

Lucky I just switched my TD Precious Metal Fund over to TD Canadian Bond fund. I moved my TD Precious Metal Fund over when it closed at the NAV of $79.48 about a week or so ago and on the day gold drop $64.90 (Sept 22, 2011), the closing NAV on Sept 22nd of the TD Precious Metal Fund is $70.64. Wow, that is a drop of almost $9. One thing about precious metal mutual funds is that it moves in tandem with mainly the stock prices of gold mining companies, and it would seem that the gold mining companies also took a hit.

Looking at the charts of most U.S indexes over the last 2 weeks or so, it is clear that things are definitely volatile. The stock market have been bouncing up and down and having trouble breaking past previous ceiling. The markets are trading in a range right now.

I’ve been keeping a close eye on the Nasdaq and it has been trading in range right now between 2350 to 2470. There seems to be downward pressure because every time it rallies up, it cannot seem to get past 2470 to shoot through previous high of around 2560.

All over the financial news, they say that traders are all waiting for an announcement from Ben Bernake at the Jackson Hole, economic conference. So, that is why there is a range being formed until the Friday announcement.

If this future trader is betting that the Dow Jones Industrial Average is going towards near 2009 lows of 8200, then it should take the Nasdaq also down to near 2009 lows, which is around 1750 points. I would have to agree with this view and it might take several months to get to that level, however you never know sometimes with the market, so we will just have to wait and see.

I started purchasing HQD.TO (Horizon Bear Nasdaq ETF) again. Some at 2450, and then some at 2500 points on the Nasdaq. I will look at loading up some more when the Nasdaq hits 2578 or higher, if it ever gets there.

If you think about the highs for the Nasdaq this year which was slightly above 2800, it is unlikely in this current economic environment that it will hit that high again.

About 6 months ago I warned a family member to move all his investment to cash or Canadian bond position, however the response I got back, was “Why should I do that, the financial stocks are doing very well now.”
I however, did not press the issue with this family member because I didn’t want to seem like a know it all, but I knew that the rise in the stock market will be followed by a sharp and violent downturn and it finally arrived.

I’ve been anticipating the U.S stock market decline for a while now and this week the Dow Jones industrial average declined below 12,000.

I believe there is more downside coming in the near future. My initial assumption was that this decline will start near the end of June, however with markets it is always difficult to know when it will actually happen.

As the stock market loses strength here and has problems moving higher I have increased my positions in both the Horizon Nasdaq bear ETF (HQD.TO) and the Horizon S&P bear ETF (HSD.TO). The Nasdaq index has had problems breaking above 2800 and the S&P has no ooomph to get past 1340 and it is stays like this for another month then I think we are going down.

I recently sold off my position in Claymore’s Gold ETF that is traded on the Toronto Stock Exchange (CGL.TO). I bought at $12.45 in early January and just sold at $13.58 which is roughly a return of 9% minus commissions. That is just under 9% return for 5 months, that is not bad considering money market and guaranteed investment certificates (GIC’s) are interest are very low.

In the short-term this might be true for the stock market, both S&P and Nasdaq broke out. I think it is possible to see S&P up to 1500 and Nasdaq up to 3000 however only in the short term (3 months) though. After that I don’t see much evidence of economic growth to push the stock market higher…unless U.S Fed , Bernanke prints more digital money out of thin air.