The Dow spend most of the day working itself back up from a deficit of more than 150 points. Around 1:40pm, it finally worked itself to a gain of over 200 points then the selling starts. The Dow loses over 250 points in the next 2 hours, and in the last 10 minutes of trading, it gave up over 200 points and the Dow ended the session with a loss of 203 points, the SP500 closed down by nearly 28 points, and the NASDAQ ended with a loss of 46 points. What's more revealing is what happened to these indices.
The NASDAQ finally close below the October 10, 2008 low. I believe the breakdown in tech stocks is not about the credit crisis. Instead, it is all about consumer spending and the recession. The NASDAQ seems to be indicating this Christmas season's consumer electronics sales will be weak, and businesses will be cutting their 2009 technology spending budget more than expected.
The Dow and the SP500 both closed at another new 52 weeks low, and they are still above the October 10, 2008 low. Once again, the DJ Transport confirmed today's Dow Industrial new low. Therefore, Dow Theory tell us to be on the lookout for lower low.
I don't know if you saw what I saw, but certainly today's market development was anticipated, it just happened a bit earlier than I had expected.
