Get Ready For A Test Of The 2002 Stock Market Low!

Stocks sold off again today with the Dow Jones Industrials down 679 points making a 5year low. If you look at the above monthly chart of the S&P500, you'll notice that this month's range is the largest MONTHLY range in at least 10 years and we are only 9 days into the month! That gives you an idea of how fast this market is moving.

One thing I've noticed about markets over the years is that they tend to test significant levels of support and resistance. For example the 2002 to 2007 bull market ended on a test of the march 2000 high. If you look at where we are now you will notice that the S&P is about 125 handles away from the 2002 low. In my opinion I think we will see those lows from 2002 tested especially since I am bearish due to the 4-year cycle in the stock market which forecasts lower prices going into 2010!