Wednesday, January 14, 2009
The March to Below 740 is Underway; Jan. 14, 2009
I was wrong in expecting a rally in my post yesterday. But with the larger trend down, suprises will be to the downside. The break of 850 in the S&P (see red horizontal line on chart above) confirms the march towards breaking 740 is underway. The market won't get there in a straight line, although it has so far, so I'm taking small short positions off the table as the market falls. When the market rallies, I'll add those positions back on. This is the 7th down day in a row for the Dow and no significant rally has occurred while the S&P has dropped almost 100 points! So a strong rally should occur soon. But it's not required.
740 should be broken within the next couple months.