Offical Bear Market for Dow?

6/29/08

Friday Dow index down another 106 points and posted 19.8% correction since all time high. All medias kept writing Dow is about into BEAR MARKET. Well, those 20% term often making people confused the stock trend stage. I had said the main uptrend was broken since 12/2007 and market were already step into BEAR trend. Technicians are already knew it 6 months early than today's everyone sense. S&P did fall into the support zone 1165-1175 area and got little bounce. But the VIX index still showing no fear yet. In order to make a good solid bottoming process, we need to see VIX way into 30's area. It does not mean that market could not have meaningful rebounce from this level. But, as market technician, I would get more evidence, more signals to call the market has bottomed. I would guess the Dow would have at least 1000 points rally after bottom. The crude oil future is still pointing strong upward momentum and the trendline built from 2/2008 has not been broken so far. So, do not give non-sense wish oil future would fall huge unless that uptrend line broke.
Folks, the Fed, our Bush's government both cannot help to avert US economy into recession or even depression. With global inflationary pressure increase, it is a very hard task that our Fed could do to control it easily. OPEC president voice out loud the oil future will go to $150-$170. Housing is still in worst zone. Credit squeeze rebuild again with all Fed magic did not work at all. I would expect more banks would failure and the size of those default banks would get larger. I am still remain Bearish.