Posted on 02/28/2009 11:18:50 AM PST by arkadyka
I have not done a stock market post in a while, but this one is important considering the latest developments. The latest time I spoke about Dow 7000 and why a hold of that support line is extremely crucial.
Unfortunately it seems like the break will happen inevitably and doing so will essentially open the flood gates. I have provided a chart for you that someone else made and it illustrates a very obvious long term pattern, a chart of the S&P 500.
Don't mind the wave count, but do realize that flirting with 2001 lows really illustrates the weakness of this market. If in the next few weeks Dow 7000 or in this case S&P 750~ is broken then expect the market to shave off another 50% of it's value! There is good news in all of this though, once a breach of that vital support occurs, a reflexive bounce will occur via a powerful bear rally. Thi rally could be a 30-50% move and will provide an opportunity to exit all long-term positions, however for the most part it will only suck more unsuspected individuals into a powerful move down to the ultimate lows of (Dow ~4000, S&P ~400). This happens in history all the time and will happen again.
If these long term projections are met, then it might take anywhere from 5-12 years to recover back to the highs of 2007!
I call this the Obama stock market because his administration and his policies are completely and utterly responsible for this vicious sell off. Even though the financial collapse is not his doing, the amount of damage his promises and policies do to the market cannot even be measured.
(Excerpt) Read more at rkdpolitics.blogspot.com ...
You are asolutely right, it is an extremely morbid and scary thought - but national healthcare almost always guarantees an outright neglect of the elderly. We are already seeing proposals to reduce medicaid payment to seniors.
sick stuff.
The S&P is a much broader index and not following it, is like not following what the House is doing in politics.
All 3 indexes generally move at the same rate, but one can get a good indication of market health by seeing who is leading who.
A 4th index, the Russell 2000 is a great measure of broad small time investors/traders.
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