dow 8500 a break a collapse, page-7

posted this earlier on the XJO thread buty should have posted here :

It has only occurred to me in the last few days how significant the US bailout of the big 3 car makers is. Or should I say the inevitable assistance of the entire car manufacturing industry, as it was revealed that Honda and Toyota are also in a lot of trouble as well. Not to mention the auto part industry(which is massive). In Michigan and Ohio alone there are literally hundreds of thousands of people connected to the industry.

There is also a massive amount of intertwined corporate bonds connected to the big three in particular. These will all collapse along with billions of dollars of the people that hold these bonds. Not to mention all the CDS's that are going to default if they are to fail. Seems to me that the Senate is playing with fire the longer they wait. It's the TARP story all over again imo. Even if they pass the $14b it will only resolve in them kicking the can further down the street imo.

The US market is at a crossroad, it's either going down or going through a roll over and March is leading the way. The S&P500 is sitting on a Dec March pivot area. It's either going down to test 867 area or up to 919 and 924.5, if it clears 924 it should go to 1010 in the short term at least before the next leg down.

Make no mistake, if the Senate do not pass this bailout the markets will head down very quickly indeed imo.