Will We Break Through The November Lows?
Does the latest meltdown in financial stocks on Monday indicate that we are about to retest the November lows in the market?
Will the Dow Jones Industrial Average, which closed at 7,949.09 on Monday, retest the November lows of 7,449.38?
Is it just a matter of time, or will the markets settle and rebound from these levels?
Will the banking crisis continue to weigh on the markets, or will strong earnings news from IBM and a new president re-energize investors?
In a bear market, you have short and powerful rallies in the midst of an overall trend lower.
The DJIA rebounded sharply from its November lows, trading as high as 9,000 in late December.
Since then, the DJIA has given back a great portion of its Nov-Dec gains, and is knocking on the door of 7,449.38.
Against a backdrop of continuing turmoil in financial stocks, a test of 7,949.09 seems likely.
However, the market has a history of zigging when everyone thinks that it is going to zag.
Will a continuing global recession push down the Dow to new lows, setting off another wave of panic selling?
Or will the markets refuse to buckle and hold at 7,449.38?
What do you think? Please post your comments and theories below..
Filed under: The Economic Meltdown