Brutal market today for the longs. It took off early in the morning with a significant gap down and never looked back, closing down over 8% on the day. This is going to send jitters throughout the world markets, and the question becomes, not so much if it goes down from here, but where does it put the breaks on at.
Honestly, one of the biggest discouraging factors for a bottom being put in this market, is that too many people are calling one at the current price levels, believing that the November’s lows were the end to all the pain and suffering. Thus the reason that on a traditionally, low-volume, holiday week, we got such a huge rally.
But what I believe we will see is a the November lows taken out, and the chorus of CNBC yuppies that insistently call these bottoms will be shut up, and never again call a bottom; all the retail investors, and bloggers will finally give in and say, “I give up on finding the bottom” and then at that point, the bottom likely will be formed.
Am I Predicting a bottom? Absolutely Not! Maybe we go to 7000, perhaps 6000, heck maybe even 4000 on the Dow. I don’t know and I honestly don’t care. What I will be doing is compiling a list of stocks that I will focus on once, the market finally does turn over a new leaf, and be ready for the incredible opportunity that will be before us.
Here’s the Nasdaq and S&P charts…