有感：股市

Dow Jones Industrial Average dropped 513 points and DASDAQ lost 137 points on Aug 4, 2011.  It was the largest one day drop since 2008.

Fortunately I sold out all my holdings in my retirement fund in early July.  The first reason that I sold out my holdings is the debt ceiling crisis.  I knew that the market would start to have volatility.  The second reason is that there are trillions of budget cuts in US spending in the coming years. The employment rate in US is going to go down as US government tightens its budget.  US government probably is the single largest employor in US.  When more people are out of job, the salary is not to going up quickly and the consumer spending is going to go down as well. Therefore, the growth of US economy is likely to slow down.  We are likely to have double-dip recession.  In November, when additional spending cut automatically kicks in, there will be another drop in the stock market. The third reason is that last month option expiration date is July 15.

Predictions: 
1) In the middle of September, the stock will rally until the end of the month.
2) In November, the stock will plunge again.
3) We are going to be in a down trend for the rest of the year.
4) QE3 is likely.  This may change the overall picture of the market.
5) Obama will be an one-term president if Republican can find a charismatic candidate.