The Dow Chart in the link below might take the mystery out of the recent declines.
The Dow was making LOWER HIGHS AND LOWER LOWS nearly all year in 2004, until just before the election. A classic Bear Market Pattern.
THEN STARTED AN ELECTION EUPHROIA RALLY THAT CONTINUED TILL THE END OF DECEMBER.
THAT'S OVER NOW........Grim Reality has set in as ELECTION PROMISES are translated into IMPOSSIBLE POLICIES!
FINALLY THERE WAS REALLY NO GOOD REASON FOR THE LATE RALLY LAST YEAR. ALL THE BAD STUFF WAS THERE FOR THE VIEWING. THE DOLLAR THE DEFICITS AND THE RATE HIKES.
STILL A EUPHORIC WALL STREET CHOSE TO IGNORE THE DATA AND GO FOR THE YEAR END PERFORMANCE BONUSES.
NOW THAT'S OVER.....AND SO IS THE RALLY.
MY HUNCH IS THE DOW WILL GO BELOW 10,000 SOONER RATHER THAN LATER.
And then......it all depends on what happens next. But the continuation of more BAD STUFF seems to be the course of least resistance now.
Click for chart:
http://finance.yahoo.com/q/bc?s=^DJI&t=1y&l=on&z=m&q=l&c=
