Will 700 Hold? Maybe For a Bit

We closed yesterday at 700.82 on the S&P yesterday, talk about a line in the sand. This is the spot where the bulls MUST take a stand if they want to prevent another massive slide to lower levels. At this point investors are punch drunk and shell shocked and many Pollyanna’s have emotionally capitulated. No Mas, they’ve had it. You could make a bullish case from what I just said because that’s when bottoms happen, but in my opinion, the only thing this will set up is a possible oversold rally in bear market. More pain to come, unless the brain trust in Washington fixed housing and unemployment while I was sleeping.

The chatter is that Volcker has been thrown out of the inner circle because he is making too much sense and it is politics as usual. Economically our country looks like the first day of shock and awe in Iraq, but without the bombs. Taxing entrepreneurs and the only people that actually can pay taxes seems like a nifty idea right now, don’t you think?

I’m tired of being bearish, I have been for maybe 14-16 months now. It’s taxing on my psyche and quite frankly a bit depressing, but I have to call it like I see it. Stay alert for a rally but remember that this will end badly, probably worse than most people think. I still believe we will see 5 handles on the DOW and S&P, and I hope I’m wrong, but I don’t rule out the possibility of 3 handles on both. Developing……………………………

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