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Home > News and Opinion > Market Gets Hit, Alcoa on Deck

Market Gets Hit, Alcoa on Deck

Lee Siler | Wednesday, July 8th, 2009

At this point the correction is well on its way. The Dow Jones is down 8% from its recent high, while the S&P 500 and Nasdaq are down 7.8% and 7% respectively. It appears these major averages are likely going to correct at least 10%. This is a typical pullback from a substantial rally off climactic lows. Also, there is an ominous technical pattern developing on the Dow Jones and S&P 500.  You can make a case that there is a head and shoulders top being formed and could be executed very soon.  The left shoulder of this pattern started in May and now we are forming the right shoulder.  The key to this pattern is holding support.  If we break the neckline, we could be in for a more substantial drop.

Things will start to get even more interesting, as earnings season kicks off with Alcoa reporting after the close.  They are expected to report a loss for the second quarter.  But more importantly, Wall Street will be listening to what they have to say about the U.S. economy.

Futures are indicating a slight jump on the open.  However, like yesterday, I wouldn’t expect much of a rally.

Until tomorrow, I wish you a great day…

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