November 20, 2008

How Much Uglier Can it Get

This is a chart of the Dow starting in about 1982, the beginning of the super-bull market to the present. At the current level, around 7500, the market is near or at its 1998 lows and its 2002 lows. Significantly, it is also a 50% retracement of the entire super-bull!

The S&P went through its 50% retracement today. If the Dow does not hold this level it could go to about 5900, a 60% retracement of the super-bull. That would bring the market back to its 1996 levels.


  1. Shirley said...

    Thank you for the chart and the numbers. I am rather concerned, also, with the new lows that the market was making last week. Since the indexes made those lows, it brings into consideration that this is the second leg of the bear that began in 2000.

    Then, your analysis calls into contention the indexes even breaching more support levels and retracing the great 1982 super bull. I commented on that also on another web site.

    Last Friday and today, Monday, the indexes gained substantially. Yet, it has yet to be seen if the gains can hold.

  2. BeBop said...

    Shirley -
    As of today (Nov. 24, 2008) we are back in the October trading range. Predictions are dangerous at this time in that I don't believe the market is trading on any type of fundamentals because we don't have a clue about the fundamentals. It is all emotion and this is why the market continues to have these wild swings.

    Just remember Mark Twain's words: "History never repeats, it just rhymes."