RE: Market direction hard to predictNo - its not hard to predict the direction. What is harder to predict is the exact route it will take. THE DIRECTION IS UP.
One only needs to look at the above chart to see the longer term direction is ALWAYS up. If your horizon is 10 years - pick from Jan 1 of the decade start until Dec 31 of the decade end - the market has never finished down. We are nearly 3227 points down from the Jan 1, 2000 number - so this could be the first decade in the history of the DJ that we have ever finshed lower at the end. I don't believe it will be though.
What - at 3300 point rally between now and the end of the year? Ourageous, right? Consider that between Sept 1 of 2008 and the 9 of March 2009 - we went from 11, 516 to 6547, a drop of 4970 points. So far - we've rallied back less than 1/3 of that amount. Between now and end Sept - we'll get back another 1/4 to 1/3. From Oct-Dec - when there is actually some good news (as opposed to a lack of REALLY bad news that supported the rally to date) - we'll get back somewhat more than the remaining deficit and close the decade slightly up.
i think one of the more interesting aspects of the graph above is that if you look at the start of the heavy volume (late 80s) - it coincides with the emergence of speculating as the key driver of the market. Up until then it was fundamentals that drove things (except for very early on and we saw how that worked out). As much as I am a capitalist - I hope they do reign in the speculators who investment horizon is 10 minutes or 10 days, not 10 years.