I am going to keep this brief, I will more indepth to say this weekend.
Todays action brought the Dow very close to breaking its Dec 2004 lows, near 10,440. Should that happen, it would be bearish and also confirm the weakness seen in the Transports (already below their Dec lows).
What does the Dow see that we cannot?
This has been the weakest markets during a recovery in history, considering this weak action has come in the face of the largest stimulus and tax cut plan in history, Fed lowering rates to 45 year lows, this SHOULD be a cause of concern.
EVERY LAST BEAR MARKET has returned the markets to below known values, meaning near single digit PE ratio's and a dividend yield near 6%.
Do the math, a 50% hair cut from current levels would not be out of the question.
Tomorrow is options expiration Friday and it could get wild, with swings in price. Regardless, it certainly seems like the trend has reversed and the decline which began in JAn has farther to go.
Duratek
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