7600 is a key level on the Dow
Pick a number, any number... Seriously, why is 7600 important? Because somebody on CNBC said so? I'm not giving you a hard time, of course. I just don't see 7600 as having any real significance and see the new low on the transports as much more important, especially coupled with the strength of bonds and utilities, and the weakness (a bit of an understatement?) of financials. The bonds not selling off after the rate cut news earlier in the week is just another indication that tiny cuts in fed funds will do nothing to ward off recession.
FWIW, I don't see much more upside in bonds - kind of a buying panic going on. I dumped my bond funds in favor of money markets (higher yield, for now).
Back to stocks, the Dow, S&P and Naz all finally broke out of their flags and should, IMO, take out the 8/31-9/1 lows. If this leg takes us to 6500 on the Dow and low 800s on the S&P, and assuming the recession is only going to be a mild one, that'll likely be a great place to buy (but quality, not tulips). However, tax selling would likely delay any real turnaround. Also, it won't be over, IMO, until the high flyers and tulips get crushed.
JMO,
Bob |
