If you watch Fast Money regularly you might remember back in November technical analyst Louise Yamada told us the Dow would be trading at these anemic levels. (In case you’re not familiar with Yamada, she’s runs her own firm and is one of the most widely followed technical analysts working today.)
In fact it was on November 20th when she made the very bleak prognostication. She said “everything is going down.”
At the time it seemed like a lot of doomsday talk. In fact, Macke even joked that if you’re going to prognosticate catastrophe you should make it rhyme like this; “the bigger the pop the bigger the drop,” he laughed.
But 13 of the Dow 30 had already broken their 2002 lows. “if you start losing 13 of the 30 bricks in your wall, that wall probably isn’t going to hold up,” Yamada retorted.
And she was right. So what does she see going forward?
Unfortunately patterns in the S&P don’t translate into good news. Yamada sees a clear 10 year double-top and suggests we probably have further to fall.
“Now that the 2002 lows have given way we have further to go," she says. “The first targets are 6,000 in the Dow and 600 in the S&P and the second target, I hate to say it, could be 4,000 and 400.”