Dow Beats The 2003 Low!

Yes, the Dow broke the low of the last crisis today as it closed 250 points lower, breaking its intermediate neutral trend. As such, the Dow has now resumed all out primary, intermediate and short term bear trend. In fact, the Dow has not only erased all its gain since the last crisis in 2003 but also everything since 1997. Yes, if your IRA or retirement account has been invested in an index fund since 1997, you would have been back to square one or worse.

Investors are obviously not so pleased about the idea of the government buying significant shares in Citigroup and are also worried about how this Friday's GDP number would turn out (see economic calendar). My take? Call it anything you like, nationalization or anything, as long as it solves the problem, to hell with politics.

I suspect this could be the final capitulation before the recovery. One final leg down before the selling dries up. The issue is, how far down would this leg go? Well, certainly not as much as it already had and investors would certainly be wiser to buy into weakness prudently using the Fiduciary Call strategy where you replace the stock with its options so as to limit losses should this capitulation go on deeper and longer than expected.