Investors woke up this morning staring at a stock market about to touch levels not seen since 2002 - the start of the last bull market.

As they wiped their sleepy eyes and scratched their heads, traders wondered, was it all just a dream?

Considering the S&P

.SPX loading...

Quote  |  Chart  |  News  |  Profile

[.SPX  Loading...      ()   ] settled below 776, a critical threshold, it could mean that the so-called bull of '02 to '07 was just one, giant bear market rally amid the sell-off that began in 2000 after the tech bubble burst.

Dream World

Freud said that we resolve conflicts in our dreams. Perhaps the stock market is no different. Maybe it’s actually working out conflicts left in the wake of the excesses of the '80s and '90s.

We’re talking inflated home values, excessive risk taking, shadowy derivatives, and self-destructive lending. All of which can be linked back to low interest rates.

The previous five years were great for investors living in a dream world, but with this market experiencing the fourth worst decline in the last 80 years the real question is, is the nightmare now beginning?

A Nightmare on Wall Street?

Unfortunately, the short answer is yes, according to technical analyst Louise Yamada. She says, “I think the charts have been forewarning us that the markets are deteriorating.”

"The 2002 lows are very vulnerable and chances are good they are going to be broken," she tells the traders, grimly.

If you look at the chart below you see a massive double top with a critical 10 year support at 2002, she says. “And we're breaking that support.”

(.SPX) Loading...       (%)

In other words, not only has the S&P fallen below its 2002 lows, but it will likely continue lower from there.

Sound far-fetched? Maybe but Yamada is one of the most celebrated technicians on the Street, winning the award for best chart analyst 4 years in a row from 2001 to 2004.

She has a 600 target on the S&P 500 and a 6,000 target for the Dow. That's where she thinks we're heading.

What do you think? Tell us now!

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Current DateTime: 02:08:22 09 Jan 2009
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Trader disclosure: On Nov.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Karabell Owns (AAPL), (C), (CSCO), (GOOG), (JPM), (UYG); Najarian Owns (AXP) Put Spread; Najarian Owns (C) Puts; Najarian Owns (CVX) Put Spread; Najarian Owns (IYR) Puts; Najarian Owns (IYR) Puts; Najarian Owns (SCHW) And Is Short (SCHW) Calls; Macke Owns (SDS), (MSFT), (WMT), (UUP); Macke Is Short (YHOO)

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