Major Indexes Break Key Support, Close At 9 Month Lows

A couple Fridays ago (1/4) I put key support as follows:

Dow: 12,700

S&P: 1400

Nasdaq: 2450

And I wrote:

I’d expect these levels to hold today.  And we could even see a bounce off of them in the short term.  But those are the levels to watch, in my opinion, over the next few weeks.  Any sustained break below these levels would be confirmation for me of a bear market.

Well we broke through those levels decisively today with the major indexes closing at the following levels:

Dow: 12,501

S&P: 1381

Nasdaq: 2418

Those are all below the August 15th and November 26th closing lows and therefore mark 9 month closing lows on each of the major indexes.

The next level of support becomes the March lows with support as follows:

Dow: 12,000

S&P: 1375

Nasdaq: 2350

After that, the Summer ’06 lows come into play with support at:

Dow: 10,700

S&P: 1220

Nasdaq: 2000

Those levels represents drops of 14.4%, 11.6% and 17.25% on the Dow, S&P and Nasdaq, respectively.