2009-01-16, Friday
Will the bottom of Dow 7500 hold?
The burning question in investor’s mind nowadays is that if the Nov 20 stock market low hold? Have we seen the worse yet?
The short answer is NO.
The market made two important lows since late Nov: dow 7500 on Nov 20 and dow 8000 on Dec 2. If dow 8000 is broken decisively, it will expose dow 7500 for bear to attack. You might quickly point out that yesterday the market broken 8000 (7949 to be exact) and rally intraday. It was a successful test. Only in the first attempt, though. 8000 should be tested again soon or after the much hyped inauguration at the latest and broken in the second try.
There is saying that the real bottom should not even be tested. Now, you get the idea. It is just a matter of when the dow 7500 will be broken, not if.
If you need more clue, look at the Nasdaq leader AAPL, it is teetering on the last Nov low of 80, which doesn’t stand a chance to hold. BAC already broke last Nov low of 10 and C race down to penny stock status. The ominous signs are plentiful…
