Not since the late 1930s has the stock market technically been as low as it is now. After a week of rallying, the DJIA dropped 680 points, surrendering more than half its recent gains. The S&P 500 Index and NASDAQ responded in kind, with the broader index shedding nearly 8 percent in one day.
Not since the late 1930s has the stock market technically been as low as it is now. After a week of rallying, the DJIA dropped 680 points, surrendering more than half its recent gains. The S&P 500 Index and NASDAQ responded in kind, with the broader index shedding nearly 8 percent in one day.
The economic news is bad - manufacturing worldwide, unemployment data, newly announced pending layoffs from major financial institutions.
And worse yet, both Ben Bernanke and Hank Paulson spoke today, reinforcing investors' lack of confidence in the Bush administration's team of economic knuckleheads.
Wall Street remains slow to comprehend the depth of this recession. Hence, in addition to their employers' lack of desire to see stocks' earnings estimates reduced, let alone SELL recommendations shouted out, analysts simply lack the broader outlook to highlight the dangers that still remain.
If anyone expects that we will not see continued waves of tax selling before year-end, well the awakening may be very rude. We will no doubt see a retest of earlier lows. We are less than 600 DJIA points away. I've suggested even lower lows before this market reaches bottom, 7200 on the DJIA and 700 on the S&P500. Investors strongly dislike uncertainty and we have months of it ahead of us.
The good news is that the market will eventually truly reach a bottom. But it won't be a bottom based on wishful thinking or some respected investment strategist waving a magic wand. We will need evidence of a slowdown of the slowdown. And regardless of where you look, we are not close to having that vision.
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