Projection of the Dow the remainder of the week.

The Dow, Nasdaq and S&P 500 all dropped today. The dow was down over 100 points and the question is what is the prognosis for the rest of the week. To take a look at the charts for a moment, you will see the Dow as compared to the stocks which have been leading the rise. The summary is that these leaders are actually much ahead of the Dow's drop so far and so I believe this is these will lead the Dow lower in the coming days. The only question remaining is whether we will go below the previous low which occurred on March 16th.

Market comments for beginning of Earnings season

So we have started earnings season and while Alcoa beat earnings estimates by a penny, they missed on the Revenue side. I thought it might be useful to see what the P/E (Price to earnings ratio) is for the various Indexes before all companies have reported their earnings. So here are the current P/E's for the many country Indexes and you can decide which is overvalued and hence suspect to dropping and which might be undervalued and worth looking at.

Dow Jones Industrial Average 14.16
S&P 500 15.42
Nasdaq 38.93
Russell 2000 32.57
England's FTSE 14.74
France's CAC 12.11
Germany's DAX 12.97
Japan's Nikkei 17.24
Brazil's Bovespa 11.33

Seems to me that the Russell 2000 Small Cap Index is very overvalued at this point and a major correction looks likely. You decide.

Jan. 12th market closing action

Well the market closed down on all 3 indexes today as predicted. The Dow was down 125 closing at 8473 for the day. SDS did gain, closing at $75.35 and TZA closed at $55.50 today. Both were healthy gains from the close Friday. Remember, I still believe they were worth buying today as they are still going to go up as the market goes down.

Apple stock, symbol AAPL, dropped to a low of $87.55 and closed at $88.66/share. I expect tomorrow to also be down as earnings start to be reported. Alcoa reported an unexpected loss of $1.2 Billion for the quarter, reporting after the bell today. It has lost 68% of its stock value in the past year and they expect continuing decline in Aluminum prices. Alcoa is a Dow component. There is a real concern they may not be able to continue paying its dividends.