No Christmas Rally, No January Effect

Late last year, there is no Christmas Rally. In the beginning of 2008, there is no January Effect. So far this year, the market had been going down. Typically, it indicates that it is highly likely that the market would end lower at the end of the year.

Currently, the Dow index is closing in towards the Aug 2007 lows (a strong support level). S&P 500 index and Nasdaq composite index is also closing in towards Aug 2007 lows. Typically, the market would like to test and break this strong support level. The stochastics, MACD and RSI indicators showed that the market is oversold. I would be careful and be alert just in case the market reverse once the market touch or near its Aug low. I do expect some kind of retracement before the market continue in its downtrend. However, should the market breaks the Aug 2007 lows with a spike in volume, the market could continue in its downtrend without much retracement.

- PersianCat04 (Millionaire-in-progress)