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Urgent Warning: "Watch Out Below for a Repeat of 2008"
By Dennis Slothower Editor, Stealth Stocks
Stocks finished near their worst levels of the session on Monday, and closed lower for a fourth consecutive day.
It looks like everyone is getting the picture, so forcefully driven home the last couple of weeks, that the economy is fast choking and -- in spite of the QE2 POMO injections -- investors are quickly heading for the exit door before the Fed stops QE2 altogether.
Frankly, there were no economic reports to speak of on Monday, but that still didn't stop investors from making asset allocation shifts to a more defensive posture, raising cash in lieu of the risks of a possible recession coming our way.
Crude oil fell $1.21 to $99.01 and energy and financial stocks were hit hard as selling was broad based. The US dollar gained on Monday with gold advancing $4.8 an ounce but struggling a bit with its recent highs.
Warning: We're About to Test the 200-Day Moving Average
Given the absence of fundamental news, let's focus on some of the technical issues, which are certainly feeling the effects of what I have warned you about clear back in February when oil prices shot above $90 a barrel.