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In the midst of this financial crisis one must be wondering where the bottom is. There have been estimations ranging from 6 thousand to 8 thousand. Personally, I had seen 7,000 as about the right estimate for the market bottom before we will see increased flatness and uncertainty about the future of our markets. The auto-industry news was to an 8000 support just as Lehman Brothers and Financial Bailout was to 10,000 as a support level.
The truth is that shocking news can break through as support. A seven thousand level of support for the Dow Jones as I am predicing does not mean that the markets will hit 7000 and then skyrocket like there is no ceiling afterward. The point is that the markets will not end a day under this level barring some major news more than one day. In October of 2007, the Dow broke 14,000 and closed above that point for one day. The next day, there was a sell off as people wanted to cash out all their huge gains from the months and months before. I see 7000 as the point at which rational investors will see as a good time to buy and jump on board. The markets will not just jump into the marvelous green from here and they wont do that after they hit 7000 either but the point is that the speculative selling will eventually lessen over the course of the next 2 months and the markets will stabilize to a very flat point during which one should buy. You know the saying "buy low, sell high"? Well 7000 is the point where we think you should see as a spark to buy and wait for this long term investment to pay off.
