Thursday, November 20, 2008
There has been unbelievable price destruction of equities over the past several weeks. A few weeks ago, I posted the long-term chart of the S&P and indicated that a testing of the bear market lows from 2002-2003 would be inevitable. Well, I thought it would happen after some type of oversold rally to relieve some of the selling pressure, especially as we have entered favorable "seasonality" (November and December are typically very strong months).
I don't know what to say or what's going to happen next. Ever indicator that I and every other trader follows had been pointing to a rally. It never occurred and there has been a major price breakdown, below the lows of the previous bear market. The ultra-confusing thing is that the S&P is below, but the Dow and NASDAQ still have a little way to go to get back to those old lows. Will every index fall below? If they do, and there isn't a major rally in the next 1-2 days, S&P 600 and Dow 6000 will be the next stop.
I feel badly for everybody that has lost so much money in this market. It just doesn't seem fair that people can slowly put away money month by month in their 401K or investment accounts and have 5-10 years of gains disappear in a matter of weeks. No one ever said that the market wasn't risky, but still, it's just a travesty.
P.S. Ford hit $1 per share today and Citigroup fell below $5.