Just to give you an idea of how bad things could get out there, take a look at the historical crashes of 1930, 1962, and 1987, as compared to today. The chart is from The Big Picture, a blog favorite.
Sure, we’re getting to the point of extreme oversold conditions, but I wouldn’t try catching the falling knife just yet. Fears of a recession, earnings disasters, and failed Fed attempts to stimulate the economy are falling on deaf ears. And if you think the Administration’s stimulus package will do anything, it won’t.
It, along with more aggressive, fear-mongering Fed rate cuts, will only delay the inevitable drop to our 11,000 target. Stay safe.