Sunday, March 2, 2008

Extreme Bear Market Warning?

I have noticed something important in a few US Stocks.

The million dollar questions with respect to any large Bear Market is where will it end? How low will it go? Is it over yet?

Three US stocks are coming close to dropping below their lowest lows during the Bear Market that began in 2000 and ended about 5 years ago. There may be others.

Home Depot (HD) and Dell Inc. (DELL) and Citigroup (C) have all experienced large price decreases. The interesting thing at this time is that these stocks are all getting very close to breaking below their lows of 5 years ago. Citigroup is almost there....perhaps Citigroup is the canary in the coal mine.

From a technical standpoint this would be very important. If they do drop below their lows of 5 years ago (2002) this may be an early signal that the indexes will do the same.

In could be an early warning that this Bear Market has the potential to retrace all of the US index gains of the last 5 years.

Click on the links above to see the charts.

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