Wave 2 of Market crash

[Dave Kennedy]

Could we see another substaintial downturn in the market?

It's funny how quickly the media swung after Monday's huge gain. Everyone said how it was over sold and this was due. They expected the market to float closer to 10,000 in the coming months. Although they didn't expect much appreciation. They said it was most likely the bottom.

Its true in the next week or two we may catch or breath from this huge fall but I don't think it's over.

Wave 1 of the selling, was a bit of panic and also the banks/investment companies dragging everything down with it. A lot of the down turn hasn't effective quarterly earnings reports just yet. We are seeing a glimmer of it now in the Q3 reports....the real blood will be in Q4 and 2009 forecasts.

The retail numbers that came out today and led to the sell off are really just the begining of what investors will see on balance sheets/income statments. They realeased a 1.2% drop in sales in the month of September, which was before this colossal market crash. Think of what Octobers numbers will look like and how about this years holiday season vs last years.

Although we may stablize in the near term I think we will shortly see wave 2 of this market sell off , this time based on real numbers.

Though many believe this is already priced into the market, I don't believe it is fully priced in. I think estimates/sales/target numbers are going to be crushed and it will probably lead to a phase 2 of panic selling.

You'll also see unemployment numbers rising which really scares main street, because it hits home more.

I think we've got a ways to go in the Market sell off. Today was just a small indicator.