First let me state that I agree that the market will not go to zero.

The extent to which it could fall however is frightening. Back in 2002 I noted a massive "bankruptcy head and shouders" formation in the $NDX. Its head is at about 4750 and the neckline is a perfect horizontal at 1100 stretching from 1998 to 2001. Although the neckline was originally broken, the huge injection of capital (or loose money policy which caused the housing boom) caused a 2003 recovery.

Since then we have twice tapped that neckline at 1100 in 2008 and again in 2009. If that level fails the original projection is likely to come into play. 4750 - 1100 = 3750. 1100 -3750 is the projected target and would put us at -2650 hence the term "bankruptcy" head and shoulders.

Should the 1100 level break there will have to be a decision made as to whether to attempt to save the stock market or the dollar. Regardless of which choice is made much, much more money will come into the system.

Good for gold relative to the dollar and other currencies in either case.

P.