Remember this from early December?:
...With that in mind we’re probably looking at a “Happy Days are Here Again” rally that will be just long enough to suck the sideline dollars in, followed by a depressive “We’re screwed, the economy is worse than we ever thought” final decline of this cyclical bear.The numbers to keep in mind are the DJIA's closing low of 7552.29 on 20N0v08 and the intraday low of 7392.27 the next day. The S&P had the same pattern closing at 752.44 on the 20th and intraday, 741.02 on the 21st.
Unfortunately we’ve got another 7-10 years of secular bear....
The Standard & Poor’s 500 Index wiped out more than half its gain since rallying from 11-year low in November, a sign the benchmark for U.S. equities may drop more.
The S&P 500 fell 3.4 percent to 842.62 yesterday, below the 843.57 midpoint of its 24 percent advance from Nov. 20 to Jan. 6. To technical analysts, who make predictions based on price and volume history, a so-called 50 percent retracement suggests selling momentum is increasing.
“Any time you break a level, it does open the risk for follow-through,” said Roger Volz, senior vice president at Hampton Securities Inc. in New York and a technical analyst since 1982. “At this point there is probably more risk, given the weakness in the financial sector.”
The next major retracement level is 61.8 percent, or about 822 on the S&P 500, according to Volz. Using intraday lows and highs rather than closing prices, the 50 percent decline would be reached at 842.43, just below yesterday’s close....MORE