We will see new highs in the Down long before we see the final low in the economy. The ideal lows on a timing basis for the stock market will be as soon as April 2009 or by June of 2009.
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The major support is 3,600 on the Down Industrials. During ‘09, the support area appears to be 6,600, 5,000, and 4,000 - 2,600. Clearly, resistance is shaping up at 9,700-9,800. It would take a monthly closing back above 12,400 level to signal new highs are likely. If we saw a complete collapse into a low by April 2009 or June 2009 reaching the 4,000 general area, this would be the major low with most likely hyper-inflationary spiral developing thereafter.
The more pronounced lows would be due on a timing basis between December 2009 and April 2010. The most extreme target would seem to be August 2010. The shorter the resolution to the stock market low, the sooner we will start to see much higher volatility.
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A year-end [2008] closing beneath this general level will signal that we could see the sharp decline to test the extreme support at 3,600 - 4,000 by as early as April 19, 2009 going into May/June 2009. If we were to drop so quickly into these targets, this would be most likely the major low with a significant railly into at least April 16th, 2010.