stock market this week
Coming off the worst week of the year, and with the very real possibility of the Dow Jones dipping back below 15,000, the question on everyone's lips is "Where's the bottom?"
That's why Money Morning Chief Investment Strategist Keith Fitz-Gerald spoke on Monday with FOX Business' Charles Payne of "Varney & Co."about just how low the stock market can go.
Fitz-Gerald looks at the stock market's support and resistance levels, and gives us a good picture of what to expect in the week ahead - and much more. He looks ahead to the Fed's Jackson "Black" Hole summit, and speculates on when the Fed's reindeer games will run out of gas.
What's Spooking Investors in the Stock Market Today
The stock market today is down more than 200 points as China fears trigger a global sell off.
In mid-morning trading, the Dow dived 205.75, 1.39%, to 14,593.65. The S&P 500 slumped 25.78, 1.62%, to 1,566.65. The Nasdaq slid 50.78, 1.51%, to 3,306.47. The Dow and S&P are now off some 5% and 6% respectively from their all-time highs reached earlier this year.
Asian markets were clobbered Monday and European markets melted on increasing fears of a liquidity crunch in China. Major Euro indexes, off roughly 10% from their April highs, are officially in bear territory.
Today's moves continue the rollercoaster ride U.S. equities were on last week, with the Dow shedding 560 points, or 3.66%, over Wednesday and Thursday.
The blue-chip benchmark finished at 14,799.40, down 1.8% for the week, its worst week since April 19. The S&P 500 fared worse, slumping 2.1% last week to end at 1,592.43. The Nasdaq ended at 3,357.25, for a weekly loss of 1.9%.
The VIX, or the CBOE Volatility Index, soared 10.2% last week, ending at 19. Wall Street's "fear gauge" has risen four of the past five weeks, ever since Fed Chief Ben Bernanke's first mumblings about a probable winding down of stimulus.
Monday morning, the VIX jumped 2.14, or 11.23%, to 21.04, its highest level of the year.
Markets were goosed Friday after The Wall Street Journal's Fed watcher Jon Hilsenrath wrote that investors may be misreading optimistic messages sent by the Fed Chairman Ben Bernanke as hawkish.
Also, Goldman Sachs (NYSE: GS) analysts said their top recommendation for 2013 is still to buy stocks and sell bonds.
"We continue to expect the index [S&P] will close the year at 1,750, a rise of approximately 10% from today's top level. However, median historical drawdown episodes suggest at some point during the next six-months that the S&P may decline to mid-1,500s before resounding to our year-end target," Goldman's analysts wrote.
Further giving stocks a lift was a bullish statement to CNBC from renowned hedge fund manager David Tepper, founder of Appaloosa Management: "All the concerns in the markets is because the Fed sees the economy stronger in the future. In fact, their forecast shows that they will wait until a lower unemployment rate (closer to 6% than 6.5) to raise interest rates. So they are a bit easier on the front...I obviously thought they should start to taper. [But] the bottom line when the dust settles [is that the] only one place to be [is] stocks."
Stock Market this Week: Will Dow Soar Past 15,000?
The Dow Jones Industrial Average hit 15,000 Friday - so will the stock market this week see another new high?
Money Morning Chief Investment Strategist Keith Fitz-Gerald joined FOX Business' "Varney & Co." program Monday morning to discuss how much higher the market can go. Listen to Keith's take on what's ahead for investors.