Numbers keep market in a plunge

I knew this past week was going to be bad, but I didn’t know how bad.

The nation’s jobless rate hit 8 percent, the highest level in 26 years, which served to place the Dow in 6,000 territory.

Locally, Manatee County’s jobless rate hit the 10.1 percent level. It was in the 2.9 percent range when I started working here just under three years ago.

And experts say the nation’s unemployment picture is going to get worse before it gets better.

That doesn’t bode well for stocks, and the market as a whole.

Last year, people were predicting the Dow would fall to 5,000. Myself and others that this was ludicrous and representative of the sky-is-falling mentality.

Now, it doesn’t seem so far-fetched.

According to one market expert, 5,000 in the Dow might be wishful thinking.

Peter Eliades, who runs the Stock Market Cycles investor newsletter, was recently interviewed by MarketWatch about his thoughts on where the market is heading.

Eliades predicted that the Dow may actually fall to the 4,000 level in the near-term, and offered little in the way of optimism for investors.

In fact, he recommended that investors take advantage of any future rallies to lighten up on stock positions. He believes that any rally in the near future will be a bear market rally.

Asked where investors might find opportunity, Eliades told MarketWatch that gold has the potential to be a sound long-term investment and may reach $2,000 an ounce.

“But gold is not a place for the average investor to be, because it’s too volatile,” he added.

Fear in the air

As for me, I’m scared to death to invest in anything at the moment. And with the market’s action of late, I’m apparently not alone.

All the experts say this is exactly the time when stocks make sense — essentially, when the fear is palpable and “blood is in the streets.”

But this fear has been going on for some time, all the way back to December 2007 when this recession supposedly began.

Since then, 4.4 million jobs have been lost and the headlines in The Wall Street Journal continue to carry descriptors like “worst,” “lowest,” “bad” and “horrible.”

Yes, the best buys are to be had when others have sold everything and are too scared to reenter the market.

But knowing when that time has truly arrived is next than impossible to determine.

So I remain on the sidelines.

Hopefully when the true rally arrives, it doesn’t pass me by.