Friday, October 10, 2008
Back on Monday, I mentioned that the 8,000 level on the DJIA was the last line of defense. The Dow traded just below 8,000 during the summer of 1998 and fall of 2002 / winter of 2003. Both times, the market rallied back to 10,000 in six to nine months. I don't believe technical analysis is the best predictor of financial market price action, but it does provide some insight into investor psychology. There are real problems that the capital markets and consumers must face. Liquidation is a result of deleveraging, it only stops when debt equilibrium is attained.
Posted by MK at 12:20 PM