Email to Investment Partner:
Markets on the edge of a major breakdown. Next week will be very telling. From what I have read the market is very close to breaking below major support. Dow around 12,850. If this happens next week, technically it should be the start of a major correction (bear market). Other indicators like the transports have already broken their technical levels. I don’t see how this doesn’t get bad. As I have been saying, the credit crisis is just starting (even when many were claiming August was the low). Banks and brokerages have no idea how bad their assets really are.
I still hold to my thought that Dow 10K is coming….. Make sure your money market accounts (cash) is in a bank account (FDIC insured) or in a money market that holds treasuries.
Wealth destruction may be on grand scale between the hit to leveraged houses (mortgages) and stock market loses.
Remember employment is a lagging indicator.