Well I mentiond that the 8400 number was looming as an important hurdle for the Dow. Today it was repelled from that number with significant force. If the Dow does not recover immediately and get above 8400 by the end of the week. I believe, from a technical point of view another leg down is all but certain.
This leg down could be quite spectacular taking the Dow down to at least 6000 and probably 5600 before sustaining a rally. This mini crash should be completed before the end of March.
Please read the parevious two blogs to get a better picture of what this means for people with retriement plans from their jobs and/or passive investors. The financial media is fond of saying that markets always rebound and you always make money in the long haul. I provided some numbers in the previous posts which give a different perspective.
It is important to note that it took till 1954 for the stock market to accede its highs from 1929. That is 25 years before people made their money back. This potential depression has all the earmarks of being at least as damaging. Most bear markets last 3/8 as long as the bull market. This bull market was far longer than the bull market that topped in 1929. One should not expect this bear market to be short or for its recovery to be swift.
Be careful.
Jim Guido