The immortal words of Captain Chelsea "Sully" Sullenberger, just moments before landing his commuter-filled airplane in what is known as "the Miracle on the Hudson", now seems appropriate. As of this writing there has been no progress on avoiding the so-called "fiscal cliff." Many economists predict this will trigger another recession.
The Dow Jones Industrial Average appears to be in the final stages of forming a "Head and Shoulders Top." This is a bearish formation that indicates the index will move lower. The approximate distance between the "head" and the "right shoulder" indicates how far the Dow will correct. It appears we will see a regression to the 200-day moving average line which is about 12,000. From there it is anyone's guess. The next support level is around Dow 10,500. Historically, the market has not crashed in January but we have seen some significant moves downward during that month. This could create some tremendous buying opportunities over the next few weeks.
Note: The above is for information purposes only. Any decision to buy, sell, or hold any specific investment should be reviewed with your own personal portfolio manager.
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