The next downside support level is 10,700 (see chart) last seen in July 2006. Will we fall that far?
My thoughts: Almost a certainty! I think we may even see the 9,000 range later this year!
Bloomberg: Dow Average's Drop Into Bear Market May Signal Losses
The Dow Jones Industrial Average's 21 percent retreat from a record may foreshadow more losses for the 112-year-old stock gauge, based on its performance in previous bear markets.
``I don't expect this to be the end,'' said Dean Gulis, part of a group that manages about $3 billion in Bloomfield Hills, Michigan, for Loomis Sayles & Co. ``Stocks have been trending down now for basically a year. They're going to keep struggling for a while.''
The Dow slipped into a bear market for the 12th time since 1962 yesterday
The longest profit slump in six years and the first nationwide decrease in home prices since the Great Depression pushed U.S. equities to a nine-month tumble.
General Motors plunged 74 percent in the past nine months for the Dow's biggest decline as crude oil's 79 percent surge to $143.74 a barrel hurt sales of pickup trucks and sport utility vehicles.
GM fell to $9.98 yesterday, the lowest price since 1954, according to Global Financial Data, based in Los Angeles. The Detroit-based company, battered by the slowest U.S. automotive market in 15 years, faces the possibility of bankruptcy and may need to raise as much as $15 billion, according to Merrill Lynch & Co. analyst John Murphy.
Citigroup Inc., American International Group Inc. and Bank of America Corp. each tumbled more than 50 percent as losses and writedowns at the world's biggest financial institutions topped $400 billion following the collapse of the U.S. subprime mortgage market.
Earnings at financial firms and consumer companies reliant on Americans' discretionary income slumped 56.5 percent and 19.9 percent, respectively.
Bottom Line: The downward slide ain't over yet!
All the best