Further fall of the Dow

After the 7 % decline in U.S. equities on 9 October 2008 and the Dow declining below the 9,000 levels for the first time since 2003, we bring up the charts and highlight how far off we are from the highs and how much more we could decline.

The declines in the Dow have been sharp and quick as stocks declined for a 7 straight day on worsening concerns that financial crisis may deteriorate and measures by global central banks may not help the credit crisis. As of 9 October 2008, the Dow is close to 39 percent from the highs last seen in late 2007 and approximately down 35 percent year-to-date (2008). A simple analysis of the DJI chart shows that the next strong support for the Dow will probably come in around the 7,200-7,500 lows last seen in 2002-2003.

The U.S. dollar ended higher on Thursday 9 October 2008 as short term interest rates for dollars continued to rise on global money markets despite coordinated efforts by global central banks to east the credit crisis. Fears of further bank failures continue to deter inter-bank lending and this led corporations, funds and banks to hoard cash, especially in U.S. dollars. Finance ministers and central bankers of G7 countries will be meeting on Friday 10 October 2008 in Washington D.C. to follow up on measures to ease the current credit crisis.