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It has begun.

We've been hearing this every time the dow drops by more than 100 pts.

It seems to follow a weird pattern lately of dropping huge and then slowly creeping back up. A few days ago it dropped almost 400 and by close it was at +30.

The bottom will fall, I agree, but it still seems to be consistently floating around the 15000 level.

I am terrible at the markets. However my IQ is relatively high. (163+ one one scale) My strength is(was) in pattern recognition. If I had to guess I would say that based on the graphs, unless someone intervenes, the Dow is going to drop big, very soon.

Bottom out around 9K (+ or - a couple of hundred)then start going up and down again from there.

I'm most likely wrong...that's why I don't play the markets, LOL!

prisoner6

It seems to follow a weird pattern lately of dropping huge and then slowly creeping back up. A few days ago it dropped almost 400 and by close it was at +30.

I suspect that's due to the nature of the trading system.

Most of the market volume is driven by computerized trading, and it's optimized on the principle of quick decisions to make money from local price fluctuations.

I don't know about the mechanisms for avoiding loss, but once the market has gone down by a lot I would imagine there's a tendency for upward corrections based on the idea that a given stock at a given price is a "good buy." The automated traders will begin to pick up those stocks, increasing the demand for them.

Since increased demand generally leads to higher prices, I suspect that the "buy" algorithms will tend to slowly cause the index to go back up.