The Final Capitulation Begins!

The final capitulation that I have been expecting and talking about for weeks has begun at last with the Dow breaking over 400 points downwards and crushing the 8100 support level which marks the bottom edge of its intermediate term neutral trend. In short, it is a bearish breakout. This also mark a 5 years low for the Dow. Investors are obviously pricing in lousy leading indicator numbers for tomorrow (see economic calendar) and a possibility that the lower CPI will result in lower corporate profit in the months ahead. So, where is this final capitulation heading for? While it is too early to try to predict a bottom (yes, where this final capitulation ends could probably be the bottom for this bear market), it sure looks certain that the next support level would be the 2002 low at about 7200 points. Yes, giving back all the gains accumulated since the last crisis.


Both my long and short term options strategies have made money this month. Check it out!