The DJIA has managed to hold onto the lows set in March of 2007. However, there has been absolutely NO evidence nor ANY positive economic news to suggest that the selling will stop anytime soon. Look for short-term support at 11650, the highs set in May of 2006. Should that support level fail, look for longer-term support around the 10650 area.
The Nasdaq had an unbelievably woeful session last week and is currently sitting at a short-term support level of 2350. Without any immediate upside, however, we are headed towards the 2020 area. Keep in mind that there are some big name tech companies reporting this week, including Apple and Microsoft, and I think both of them will report decent numbers.
The S&P 500 is in no better shape than the rest and looks to be headed towards the 1220 area.
Simply put, there is no easier way to say it: we are in a bear market. And as I previously said last week, there is NO bottom in place and trying to catch that falling knife will only end in tears. Don't be fooled by any +200 or +300 point up days as they will be purely a result of short covering and dumb money buying. Be patient! We already saw what the market thought of President Bush's so-called "instant relief" plan and it was plainly a case of too little, too late. The Federal Reserve, however, is set to meet later this month where they will determine how much they will cut interest rates by. To be honest, we really need to see a 75 basis-point cut to see any short-term relief. I think anything less will generate a market sell-off. And that's about it from here. I'll leave you all with what I think is a very appropriate quote for the times:
"They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side" (Reminiscences of a Stock Operator).
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