DOW Stock Futures Dip Below 8000

[jeffrey]

Wasn't a good start to the week in Asia with big loses out here again - no surprise to see the DOW futures down over 250 points taking it below 8000 points. Should be another wild week:

Bloomberg.com: Futures

[Broken Arrow]

What I find interesting recently is that the US market seems to be finding an unusual level of support despite the Asian markets' performance. (In truth, we're probably more of an indicator for them than they are for us, but I digress.)

Though it's only a speculation, I wonder if we are not looking at the rippling effect of the financial crisis hitting abroad just as it is beginning to subside here (in the US)?

Merch thinks we are flagging, possibly signaling a bottom, but I'm not as optimistic about it just yet. Energy and Basic Materials sectors are still dropping like a rock. However, looking at this from two slightly different perspectives, it seems that we may still draw the same basic conclusions:

That the markets may turn around sooner rather than later.

If the US market continues this trend of going sideways, despite all this supposed downward pressure, we could have a run on our hands. Maybe not a monster rally, but at least a long-awaited turnaround with a modest bull?

If so, let it dip and buy while the prices are still good....

[kork13]

That the markets may turn around sooner rather than later.

If the US market continues this trend of going sideways, despite all this suppose downward pressure, we could have a run on our hands. Maybe not a monster rally, but at least a long-awaited turnaround with a modest bull?

I'm no expert, but I'll submit my opinion anyway FWIW... I personally am expecting this 'sideways movement' to continue for a little while, at least a month or two, likely for about 3 months (a full quarter).

My thinking: Bullish trends require both good (if not strong) performance and good (if not strong) confidence. Right now, we really have neither. Some companies are performing decently, but few (not nearly enough) are doing very well. Everyone still has recession woes/worries, people are afraid of ailing companies, and are questionable about the recent (and any forthcoming) government intervention. On a scale of 1-10, we're sitting about a 5 on both counts.

If we have one but not the other, we may see a couple days of a rally, but will normally settle back down. I think with a quarter to recover and build back up, good quarterly reports in Jan could be on the horizon, sparking confidence with solid positive performance.

I'll be slowly but steadily putting a couple hundred dollars into my MF's every couple weeks, and will continue to do so for as long as this 'blasé period' lasts.

[Broken Arrow]

I agree about the sluggish short term. "Sooner rather than later" shouldn't be misinterpreted as "right away".

But at the same time, I wouldn't wait too long for those who haven't bought in yet. Going sideways at a time when the rest of the world is dropping is a sign to get on the bus before it leaves the station!

[buzz]

Take it with a grain of salt, but I'm looking for the Dow to dip below 7000 and stay there for a while.