The Dow Jones Industrial Average suffered through another tough day on Thursday settling at 7,465.95, its lowest close since Oct. 9, 2002. That month the Dow made its low for the three-year bear market that began in 2000 and has now nearly retraced the entire upward move from Oct. 2002.
The above monthly chart is somewhat alarming. If the Dow takes out the 2002 low, there doesn’t appear to be a lot of support until it reaches levels from the 1987 crash (below 2,000) and really not until the 1974 bear market bottom (570).
An optimist may point to possible strong support at the 50% retracement level from the 1974 bear market low until the 2007 high. By our calculations, the Dow is approximately within 100 points of that level, which should provide some support.
