This is a quick note for active traders, with more details coming over the weekend...
Either 11,000 will hold, or a quick slide to 10,700 will be seen by the end of the day. Either way, the next couple of weeks should see a bounce into 11,800-12,300 range. That will be the exit of the year, if you missed our higher warnings. The next move down from the 11,800-12,300 area lower should be dramatic, shocking, scary, and very painful if you neglect the upcoming opportunity to lighten up on holdings. 8,000-10,000 should be easily approached this year, and very likely broken, on the way to test the 2002/2003 market lows (if you have forgotten, they were near 7000).
For the VERY near term (days to weeks), this is not the time to panic out and sell, as that should have been done several warnings ago that we gave at Dow levels 1500+ points higher. Buying here, however, is not for the faint of heart. It can be done, but won't be easy. Check the July 1 comments for targets if you have the chutspah.
The government is likely going to do something dramatic over the weekend to stabalize Fannie and Freddie, since their liquidity and solvency are in question. It'll could make the Bear Stearns bailout look like allowance to children. On the other hand, something is going to fail and go down the toilet VERY soon. It could be Lehman, but it cannot be Fannie or Freddie. They are in search of the sacrificial lamb.
For what it's worth,
Ken
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