Dow below 12000 since March

6/20/08

I hate to hear lots of people using the phase "market oversold" to describe current US stock markets condition. They are all wrong to use that term and not good technicians at all. Oversold markets can keep stay being oversold in a very known period such as Bear market. The Dow/S&P both keep trade downward channel. Especially, the VIX index is not in fear territory. All this mean to me, market will go lower. Hopefully, it get nice bounce from 11650-11750 area for Dow. Otherwise, the 11000 mark is getting faster than I though of. However, I am right about the timing tops and bottoms of this bear market so far. I want to mention again the banking index here. The BKX index is testing the lows of 2002. There are only two options now: 1. The Banking index falls below the 2002 in a meltdown(brings Dow/S&P to new lows of year) 2. Holds support here with the capitulation and then reverses to the upside(makes Dow/S&P retest the 08 years lows then make good bounce). The FOMC meeting is going to be next tuesday/wednesday. I expect market would be quite before FOMC rate decision date.