I've been thinking about the next leg down, which should start soon. The decline will probably be just enough to convince traders that we are still in a bear market and a retest of the low is actually going to happen. This might suggest a correction as far down as 7,000 to 7,400 on the Dow. This would be just enough to get the short traders sucked in before the next stealth bull rally takes off.
If some of the analysts are right, the next upleg could take the Dow to 9000, maybe 9500 before the rug is pulled out from underneath and we go on to test the lows again. I personally don't see it getting that high as I can't see anthing that will stop the bad news from drip, drip, dripping on us. It would take some pretty good earnings reports in April to take the Dow that high.
But first things first. Today will show whether the current rally has anything left in it. If the market doesn't go up today, it should mark the start of the next leg down. The bulls were absolutely anemic yesterday and I don't know where they expect to find any new inspiration. Timmy's shot all his ammunition for the moment and I don't think we'll find much more inspiration from him for a while. Maybe the Asian market will perk up and give the market new life.
As a side note, today marks the first day the Feds begin monetizing debt. If things do in fact turn out real bad for the US dollar in the future, this very day might be looked back on in infamy as the beginning of its end.
No comments:
Post a Comment