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Saturday, January 19, 2008

Welcome to Your New Bear Market . . .

For new traders and investors, the question is: Now what? What do we do? What's going on here? We seem to have confirmed a bear market is occuring, and we are in a recession, as I discussed on January 4th.

First of all, don't freak out. Fear is a reaction. It's not a solution.

The next temptation may to start trying to predict the bottom. But we can't predict accurately. This is a matter of trying to figure out something. What's that?

Where Time and Price Intersect

Where that will all occur? I'm not sure. Much is still coming down the pike, and prediction is a difficult thing. As much is still coming down the pike - then it's a matter of waiting. Everyone IRL that asks me about it - the biggest thing I'm telling them is: Forget the market, pay off your debt. Pay off all your credit cards. Do whatever you have to do to get debt free - because very shortly - being debt-free is going to be the new 'sexy'. Then when time (the mess has completely unfolded) and price (the reaction to that mess as reflected in the broad market) intersect? Then we'll be in a better position for the next bull run - when ever that occurs. Be it 2009 or 2010.

Keep fear at bay. Don't freak out. Just relax, and live under your means. Fear doesn't have to enter the equation. Fear is not a solution. It's just a reaction.

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