It seems like things are really starting to accelerateIndeed. This 5-day chart was taken at 8 a.m. PST and the market is looking EXTREMELY weak. I say that because when the market gaps, in this case down, it usually goes back up to "fill in the blanks" and then rolls over and continues down. In this case it never made it that far and then gapped down again this morning. Once it breaks that line at about 6700, we've got more free-falling to do.
To get an idea of how far we may go, pick your own level of support from this long-term chart. Anybody who is trying to ride this market out is committing financial suicide.
(That '65-'82 support is at 1000 - ridiculous to think that low but once panic sets it it always overdoes it. At that level, if I have any money left, After Obama, even I would get back in. :-) )
Denninger is an absolute genius; here are some of his comments made over the last hour or so:
We're done guys. Have a look at the XLF and rest of the financials. The market is going to disassemble every company in the S&P 500, one at a time. Government isn't going to force the truth, therefore, government will go down the hole when their funding capacity is cut off, and it will be. This is a binary event - either they cut this out before the backstop demands all collapse on top of them at once, or they die with it. We're done guys. I wish it wasn't true, but it is. The people who can fix it won't fix it, and we as a people are still playing "happy face", and will continue to as a society until it is too late to fix it. There are no mustard seeds, just nuclear explosions. Its over folks. The fuse has been lit. We are on the edge of a total equity and credit market collapse. It WILL happen unless something comes out of DC imminently. Once the damage is done to those pension funds and insurance companies and they are forced to start eating their seed corn there is no way to fix it. We're talking about the underpinning of the social safety net, and government WILL be forced to divert to the FDIC, which along with Treasury rates going to the moon will instnatly shutdown all entitlement spending including Social Security and Medicare. We are within days of this becoming an inevitable outcome.
You might want to do a blow up of your long-term chart to show that FDR, as bad as he turned out to be, still managed to have the market go up sharply his first few months--after his "only thing we have to fear" speech--compared with the Obama market, at 8281.22 the last market day before he was sworn in.
He sure is giving America a new variety of "confidence," is he not?!