Thursday, August 09, 2007

 

Sell off continues in Asia

It was the heat of the sub-prime contagion hitting Europe that is keeping this market drop rolling around the world. The S&P futures are down 10.75 points which might mean nothing considering the huge volatility we are experiencing. I doubt this needs to be said but if when we break through the support at Dow 13,170-13,130 then it's time to buy that generator and stock up on canned goods.

Until then, relax. Well don't relax. Just don't worry too much. Now is a good time to predict the end of this correction if it is just your garden variety blow out. (I don't actually believe it is but being flexible keeps you from being married to a bad idea.) The support below 13,130 starts at 12,750. Also, the first leg down is 870 points (14000-13130) and subtracting that from our recent high of 13695 gives us 12,825. A market that paused at these levels would be a normal bear but bouncing off these levels would force me to consider the garden variety correction thesis.

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