DOW HEADING DOWN SOUTH

The US market sentiment is extremely bearish. Investors seem not to have enough confidence despite the US$787 billion stimulus bill which is going to be signed soon by the new US President Barack Obama, who have also said that help will be provided to US giant auto makers General Motors Corp. and Chrysler LLC. General Motors has already received $9.4 billion and could get another $4 billion if the Treasury Department signs off on its viability plan. Chrysler has borrowed $4 billion, and is seeking another $3 billion. Investors are still not sure whether this help can overcome a deeper economic problem.


Chart from www.yahoo.com

The Dow closed 297.81 points lower or 3.05% at 7552.60 today, just 24 points above the 7528.40 points lowest closing price since 1998. The Dow has closed lower for 6 consecutive months. I have mentioned previously that the Dow is waiting to resume its down trend, especically if it breaks the support level of 8,000 points. The next support level, a major support level is 7,400 points. The Dow may rebound at this level or further down south and find the next support level at 6,000 points. I believe that it may head further down south because there is no sign of the bearish momentum slowing down.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.