Market comment for June 7th

As I said on my post over the weekend, this week i most critical and if we broke below the current uptrend line, we were heading much lower. Well we did go below that line and broke below some key levels. For the S&P 500, it was the 1300 level, for the Russell 2000, it was 800 and both those were broken today. The Dow key level is 12,000 and we are close to breaking below that level as well and on the Nasdaq it is close to going below 2700.

From the chart below of the Dow, you can see that the steepness of the drive down has accelerated as is shown on the 3 month chart and the 2 trend lines drawn in Red.


Expect this drop lower on the Dow to continue as we are going to test the previous low of 11,600 soon. And in my view, this is just the beginning inning of the correction. Don't forget though that markets don't go just straight down. Expect a bounce up but it will be a lower high than previous points followed by new lower lows.

I must make one statement about Rep. Anthony Weiner. The truth is I don't care what he did in his personal life regarding taking and sending photos of his crotch. What did bother me was his lying about it from the beginning. He would have been better served to tell the truth form the beginning and gone on with his life. Instead, he now is living with the embarrassment he tried to avoid from the beginning except now, we know he also lies. It doesn't change the facts that he has been a very good voice for the Democrats, which now has been silenced, at least for a while.