Tuesday, February 2, 2010

Tuesday Nite 2/2/2010 Market Commentary

Yes, the news touts that the Dow had another triple digit day. So what! It's still down. Not as down as it could be, but it's been rolling over.  The 11663 level holds heavy resistance overhead and will need serious time to be penetrated. In the meantime, the current move from 6469 in November 2008 to the near 11,000 mark in the beginning of January 2010 now needs to experience at least a 25% retracement (23.6% to be exact) down to 9,688 before it starts back up.
   In fact, a 38% retracement is more likely, and that would put the Dow down to 9,073 and scare a lot of folks.
   Unemployment, and under-employment, is rampant, with everybody knowing someone out of work and seriously in trouble with their mortgage. The current unemployment rate only shows people currently looking for work. What about those who have been out of work for a long time? And those who are trying to scratch out a living in other than their trained field? They're not even counted.
   The reason I expect the correction to go on to the 38% level around ,9000 is that there is a lot of support at that level.  It will take about 12 weeks for this to take place, so beware.
   I'll let you know when it's time to be buyers again. In the meantime, take cover.