Chart of the Day shows the latest decline that began in May for the DJIA is getting close to testing the green support line.
Chart Talk: After making a new high at 14,198 in 2007, the DJIA corrected all the way back to test its January 2000 high at 11,750 in January and March of this year (dashed green line on the chart above.) After a major bear market for stocks or indexes, it is quite common for the charts to "test the breakout from above." The chart above shows the DOW attempted to test this break-out from above in early 2007, but investors were so bullish the market didn't get down to the prior high at 11,750. This year the markets appear to have found support at the dashed green lineDuring the last bear market, the markets bottomed in October 2002 then rallied significantly before making a "higher low triple bottom" in March 2003. After a 20.2% decline from the high to the low in the S&P500 on an intraday basis, we could be seeing the same thing now with this current correction after the recent return of the DJIA to above 13,000.
For discussion of the SOX index, see "Grab your SOX, Semiconductor Stocks Ready to Soar."
Click for a FREE SAMPLE issue
My Returns 1/1/1999 through 05/31/08
My "70:30 Explore Portfolio" was up 198.7% or 12.3% compound annual return.
- $100,000 invested 1/1/99 became $298,674
- Subscribe TODAY and get the June 2008 issue for FREE!
- $100,000 invested 1/1/99 became $172,470
- $100,000 invested 1/1/99 became $172,261
- $100,000 invested 1/1/99 became $131,745
- $100,000 invested 1/1/99 became $138,784
To find out how I've profited greatly from these difficult market conditions over the past decade, subscribe to "Kirk Lindstrom's Investment Newsletter" today!