Thomas,
>>>>> Dont you guys think we are in crash mode RIGHT NOW???? You are calling for so many reflex rallies etc. that last until August etc., but don't you see the REAL possibility we are in PANIC mode right now?
<<<<<<<<<<<<<<<<,
I would categorize a crash as a pullback of 25% or greater which leads into a true bear market and that it would take a long time to recover(in terms of years). At this time I see a strong pullback with a possible downside to 7700-7800 but would still not consider that a crash. However, arguements for a crash are increasing, but they are very hard to call.
If you are talking about a very strong and fast pullback of 700-1000 points in just a few days, as we saw last Oct, I see the liklihood of that happening at the end of Sept/early OCT not just yet. That still was not a crash but a strong corrective phase of a bull market.
You mention the NEW HIGHS/NEW LOWS. If you were to compare them to the OCT dump of last year, the NEW HIGHS got to a whopping 600-700 range just a few days before the dump, so i dont see the same senerio as last OCT in terms of NEW HIGHS/NEW LOWS for this specific time frame.
On the other hand I do see continued selling, with the selling to increase by next week or as early as this Friday, after a smaller upswing or flatness. I also see a retest of the 8570 support line within weeks if not as soon as next week. If the 8570 support is broken then that would be an early warning that a crash may be coming, but it would still require confirmation of worsening technicals.
Agreed, the market looks awful, but am not fully convinced of a CRASH, at least just yet.
Barton Biggs of Morgan Stanley is calling for a 20-30% pullback and Jerry Favors has a target of 7200. Those 2 are basicly calling for a CRASH or close to it.
Seeya |
