Today I’m going to do the market forecast abit differently that usual. Normally I’d take a look at a bunch of charts and tell you that from a technical standpoint, nothing really changed after today’s massive drubbing. Sure there is massive weakness on a 4% down day which closes at the market bottom, and key levels of support are in grave danger of being broken.

The problem for me as a technical analyst and market forecaster is that my experience tells me this:

When everything in the market has turned negative, and the news is predicting doom and gloom, a bottom is very near.

How near? Well, the chart tells me 10,000 for the DOW, 2000 for the NASDAQ, and 1135 for the S&P. YOu might be wondering when will we reach these levels, and my answer is…. when it happens.

Over the next couple of days / weeks pay very close attention to market news, and analyst ratings. I suspect it will be very dreary to be on Wall Street, but just when it seems like there is no money to be made (on the upside), that’s when the reversal will happen.

Until then, use good downtrending strategies. Long puts, protective puts, shorts, and bear spreads.

-Steve

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