At Friday’s close of 10817.65, the Dow Jones Industrial Average is down 16% from its high of 12928.45 on May 2. My friend, Lewy Katorz, an angel investor, predicts a 30% drop, which means we are going down to about 9050. That seems about right to me.
Libyan rebels moved into Tripoli on Sunday and captured two of Col. Moammar Gadhafi’s sons. Even though this should push the price of oil lower, stock futures Sunday night were still in the red.
CNBC’s Rick Santelli uses some extremely wacky logic to determine the bond rally will end on Monday. But, I’ll stick with the Wall Street Journal’s in depth report of the obvious, bond ETFs rally when stocks sink.
WSJ offers a nice chart showing the performance of the long-term bond ETFs. Ironically, the fund with the biggest advance this year through Aug. 4, the Pimco 25+ Year Zero Coupon U.S. Treasury (ZROZ), up 18.8%, actually saw net outflows of $16 million.