Both the Dow Jones Industrial Average and S&P 500 dropped significantly on Friday settling below the multi-year low close from Oct. 10. The low close in the Dow, 8,378.95, goes back to April 2003 and the close in the S&P,866, goes back to March of 2003. Despite intraday losses each of the last two days, both indexes managed to stage strong end-of day rallies to settle above the Oct. 10 low close.
Many analysts had pegged the Oct.10 sell-off as a possible long-term market bottom and the furious rallies in the last 20 minutes of trading Wednesday and Thursday taking both indexes above the Oct. 10 closing prices (891 in the S&P and 8,451 in the Dow) confirmed this as an important technical level.
Ever since the subprime mortgage and resultant credit crisis hit more than a year ago, market analysts have been trying to declare that the worst is over and a bottom is in. But it took us quite a long time to get in this mess and it will probably take just as long to get out.
It would be wise to question anyone declaring a market low.
Tags: Dow, Market bottom?, S&P
