Blood in the Streets Yet?

The markets are gonna' get rocked tomorrow. The futures were down significantly today (cash markets were closed due to MLK day) and worldwide markets were smashed. Expect the DOW/NAZ/S&P down 4% or more at the onset. It's anyone's guess thereafter.

Surprise Fed cut? That's not to say it would be tomorrow but it wouldn't shock me. Of course that would send buyers swooning into the markets only to see any significant gains evaporate over the weeks to come. Only time and capitulation can heal a damaged market not a single catalyst like Fed intervention. Sure the markets would surge and trading profits booked but in all liklihood the run would be short-lived.

The Dow is now 14.6% below its Oct. 9 record close of 14,164.53. A down 20% market would suggest a target of 11,331. Incidentally, the P&F charts call for a downside target of 11,500 based on the Triple Bottom Breakdown issued on 1/15/08.

Must watch the financials' earnings this week, their reaction to the releases. The eventual upturn in the broader markets will be led by financials.