I’ve seen so many Dow 6,000 (and worse) segments on TV over the last two days that it’s time to make a doomsayer’s hall of fame. Let’s start with Louise Yamada who we mentioned a couple of days ago:
Chartology: When Will The Selling End?
The previous five years were great for investors living in a dream world, but with this market experiencing the fourth worst decline in the last 80 years the real question is, is the nightmare now beginning?
A Nightmare on Wall Street?
Unfortunately, the short answer is yes, according to technical analyst Louise Yamada. She says, “I think the charts have been forewarning us that the markets are deteriorating.”
“The 2002 lows are very vulnerable and chances are good they are going to be broken,” she tells the traders, grimly.
If you look at the chart below you see a massive double top with a critical 10 year support at 2002, she says. “And we’re breaking that support.”
In other words, not only has the S&P fallen below its 2002 lows, but it will likely continue lower from there.
Sound far-fetched? Maybe but Yamada is one of the most celebrated technicians on the Street, winning the award for best chart analyst 4 years in a row from 2001 to 2004.
She has a 600 target on the S&P 500 and a 6,000 target for the Dow. That’s where she thinks we’re heading.
