Now that dow 8000 is broken, what is next in store?

2009-01-21, Wednesday

Market did what it is supposed to do yesterday, broke the 8000 level on closing basis on second try at the, get this, much hyped inauguration day. (see last friday's entry: Will the bottom of Dow 7500 hold?) Not that I don't like the new president. Market force has to run its course even in the face of historic event. Talk about respecting the market.

Market is very over sold in the short term, we also have some high profile tech earning to digest: AAPL, EBAY today and MSFT tomorrow. AAPL earning expectation is so low that any thing less than disasters will provide some excuse for bull to rally. So look for some volatility in the coming days. S&P 500 should run into resistance around 850. After the short term oversold condition worked off, the market should resume its prevailing trend: down.