More Ugly Action sets up next Pop & Drop
Today's action is consistent with our March 29th BEAR call, then advising people to sell any rally. The market popped a few points, before dropping over 500 points.
As we approach prior support, we may see some buying interest come back into the market around 10,000 on the DJIA (Nasdaq 1920) -- not because its a significant psychological number (its not) but because thats where we held the fort last time.
Even if 10,000 or 1920 holds, we would still advise anyone who missed the last opportunity to sell to do so on any move back towards the 10,400 Dow or Nasdaq 1991.
I do not think the market has fully discounted slowing GDP, Inflation, rising rates and oil yet. My previous June/July period for a 2005 new low remains in effect --
Once we enter that period, I would look to see what was cheap or outrageously oversold. For now, its apparent that the market is finally wrapping its head around some of the issues we have been concerned about.
Wednesday, April 27, 2005 | 11:06 AM | Permalink
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I keep hearing people say Dow 10,000 is not technically or psychologically important, but simply a "round-itis" number. Maybe. But it is as pivotably important as Dow 100 was to the "'29 crash" and Dow 1.000 to the '70's bear market. And it is the .618 fibonnaci retracement of the Jan 2000 high to the Oct '02 low. So in my book it "bears" watching.
Posted by: john brown | Apr 27, 2005 11:50:44 AM
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