Well, in case you haven't noticed, the DIA has basically hit a triple bottom over the last few months.  Here's the chart:

That chart really bothers me, but I can still see ways to make money here...

Now, I could go all English teacher style and write a whole blog with commentary here, but for now, I just thought the chart might be food for thought for a few of my fellow traders on TK.

Any thoughts? 

-If we go much farther down, are we going to see a free fall?  ...Another rebound? hm...tough call.

I don't think we'll see a free fall,  but I think we still have farther down to go.  There are further write-downs for the banks,  the effects of the rebate checks will be absored by the fall - mostly by gas/groceries- (the winners here are Wal-Mart and Costco which I own),  gas/oil prices are going to be here for a while - (if not for good?),  unemployment is going to keep rising (just take a look at Ford, GM, and the all airlines ).  The housing market isn't going to turn around anytime soon.  Natural gas prices this winter are going to be higher. I think holiday retail sales are going to be absolutely horendous.  

Even Santa isn't recession proof.   Adding to rising unemployment will be all the elfs Santa has to lay off.  I hate to say it, but christmas stockings are going to be a little lighter this year.

This isn't something that's going to go away in a year ( or even two ). I feel we're going to be in this environment for another 3-5 years.

The Hindenburg omen was confirmed by a second event in a 36 day period on June 16. After the above article was written.

Ever see a double top that failed? That is what we have. Failure to hold the 200 day moving average. Connecting the lines you have a new target.

http://badgerthelion.blogspot.com/2008/06/70s-dj-vu.html

They say "there is no such thing as triple bottom", so my take would be that market will go lower, but not by much ( 10% max ), it will be what will be classified as "falied breakout". The reason I think so is because XHB looks like a solid buy to me now ( few days may be ) - Puts to calls Ratio if my data is correct is nothing like I've seen before - over 26! It is a very bullish ( contrarian indeed ) indicator. Also, few other indicators I use point to bounce by mid July at the latest. Same goes for XLF - few weeks later on. That is - if nothing changes, of course, it is always "an art" on the right side of the chart :-)

I personally think there is strong support at the 12,000 level, although it could dip below that for a short period. Buying into 'basics' companies now may very well be the way to go. By basics companies, I mean of course companies that provide basic necessities and where people shop when times are tough. These companies should see a good 3-9 month return if you choose to hold them that long.

With the Saudi's no committing to additional production to try to help bring down oil prices, we may start to see some 'stabilization' in the market. It should be an interesting week with perhaps a modest rally, followed by midweek sell off period for profit takers and then end a little ways up at perhaps 12,400 or so. This of course accounts for no unexpected events or news which seem to throw things about a lot these days.