Top Line: After the negative news from BBY, we had another big down day followed by a bad announcement from INTC after hours. Let's not forget the mid-day announcement from Treasury made by Paulson which gave the market some chills, too. With all of that news, the market is getting smacked after hours and the Asian markets are getting beat up tonight. Since it looks like the market will open down in the morning, it might not...or if it does, let's see if that is a good day for the start of a rally.
The deterioration of the market over the past few days has been a decidedly trying time. With these huge moves in both directions, the average investor would probably be best served by taking their money out of the stock market all together. But, even as we see the possibility that the market moves down on Thursday morning, how much more downside is there?
Since we've dropped about 15% over the past few weeks, we think the market is now Extremely oversold. Looking at the volatility index, we see it back up to around 70 at the close which confirms the oversold nature of the market.
We would suggest that any drop in the morning should be bought, but we don't have much cash left. The post this evening has been reduced due to house guests. Yes, there are many other items for this evening but you are on your own on Thursday...The Test begins.