Looking real ugly for the casino today.

[Dr.Phool]

Dow futures are down 145 points. They were down 48 points about 30 minutes ago. Dow is now at 10,270.

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‘Major Crash’ Likely If Stocks Break May 7 Lows, Russell Says
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By Elizabeth Stanton

May 18 (Bloomberg) -- Investors should sell U.S. stocks because the market is at risk of a “major crash,” Richard Russell, editor of the Dow Theory Letters newsletter, said in a note to subscribers today.

The decline would follow should the Dow Jones Industrial Average and Dow Jones Transportation Average fall below their May 7 levels, he said. They have risen 1.3 percent and 2.8 percent versus their closing levels that day.

“If I read the stock market correctly, it’s telling me that there is a surprise ahead,” Russell wrote. “And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.”

The market started showing signs of deterioration in early April, including a shrinking number of stocks reaching 52-week highs and falling stocks outnumbering rising ones, he said. Russell, 85, has published Dow Theory Letters every three weeks since 1958 and posts daily market commentaries on his website.

Dow Theory, which stems from observations made by Wall Street Journal founder Charles Dow during the late 1800s, holds that moves by the transportation average must be “confirmed” by the industrial measure, and vice versa, to be sustained.

The Dow Jones Industrial Average fell 6.9 percent during the four days that ended May 7, sinking to 10,380.43, the lowest level since Feb. 26. The transportation gauge closed at 4,298.12, down 11 percent in four days. Downgrades of Greece, Spain and Portugal helped trigger the decline as the prospect of a sovereign default in Europe undermined investor confidence.

“If the two averages violate their May 7 lows, I see a major crash as the outcome,” Russell wrote. With the exception of gold companies, Russell advised readers to “get out of stocks now, and I don’t give a damn whether you have paper losses or paper profits.”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQgsgpaKhdJ0

[dmallind]

1. It was "looking real ugly" about a year ago at its low too

But people who had the sense to buy then are about 50% up even assuming futures are dead nuts for today,

[customerserviceguy]

2. A year ago

we were on the other side of the US banking crisis, today, we're still looking at the coming European banking crisis. I got out of the stock market yesterday, with my little bit that I use for "gambling" outside of my 401K.

Double-dip recession, here we come...

[dmallind]

3. Your choice - and depends on timing

Within 6 months it may be a wise move albeit I doubt by an awfully wide margin. I'm more of a long term investor looking to maximize my "estate". Not that it's grand enough to be an estate except technically, but hey.

I said 6 months ago at 10.2K the DJIA was about where it should be and I still think that's true. I see wavering in the 9500-11500 range for the next 6-12 months then steadier grwoth to follow. Many current wins are already baked in.

[customerserviceguy]

7. Looks like I got out at the right time

my two stock (Ford and Microsoft) tanked today, after thirty days, I can buy either of them back at a discounted price should I feel they're going to recover.

I'm not betting on that, I will look for some other more likely place to do some gambling with my Sharebuilder account.

[Statistical]

5. Double dip in Europe not so much in US.

Exports to Europe only make up about 20% of US exports. Still pretty bad huh?

Wait exports only make up about 10% of entire US economy. So 20% of 10% is 2%.

Now lets say demand for US goods falls 50% (I doubt demand in Europe falls 50%).50% of 20% of 10% is 1%.

Drag on US economy is roughly 1%. As long as China and rest of Asia is growing US economy will do fine.

Now some individual companies may have more exposure to Eruope but some have very small exposure to Europe (McDonalds).

[customerserviceguy]

6. What happens

when the European banks go down in a Greek default, and they drag the American banks with them? Will there be any political will for another bailout? I doubt it, and if it happens before November, with Democratic support in Congress (the Pukes don't have Shrub to beg them this time), then we're toast on Election Day.

[MiniMe]

4. And everybody selling stocks on the same day will succeed in crashing the Dow

What would be the cause? Everybody selling at once or some other reason?