In my previous post I said
Since the XLF is the sector that is causing all the problems, lets compare it with QQQQ during the dot com bust. It went from 120 to a low of 20, an 83% drop. So by those standards, the bottom should be... 6.5 (ouch). Is that reasonable? It seems like a stretch since the height of the dot come bubble brought about huge valuations for companies, but then again this disaster should also take away huge valuations from banks. I would at least expect continued downside from here, hopefully not straight down like it has been doing lately.
It hit a low of 9.24 today (pretty much straight down). To hit a low of 6.5 we need another 30% move down (that is only 3 more days like today).
This market is crazy manage your risk, whether long or short!
Also watch out for a rally to test the recent breakdown (SPY at 84) in the indexes.
