Alas, the key support levels watched as a possible market bottom failed yesterday. They were:
The three closed yesterday at:
The news gets uglier each day. The latest is that Treasury Secretary Paulson has changed his ideas for what to do with TARP funds, now that $200 billion has been sent to banks that have refused to lend any of it out. The Federal Reserve says the recession will extend well into next year, and expects unemployment to reach as high as 7.6% — but that’s conservative in the estimation of many economists, who are expecting 10%. Last summer’s fears of inflation have been replaced by fears of deflation, which is being billed as a more ferocious beast. “Bring back $140 oil!” is a hard refrain to get behind, but apparently prices rising too high beats prices sinking too low.
The trend now is to look at where we are in the investment cycle of emotions. I’ve gathered two charts representing said cycle. The first is from The Market Oracle (click to enlarge):
The second is from Westcore Funds (click to enlarge):
Looking over those two, where do you think we are?
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