Investment guru Ralph Acampora, one of the famous stock market bulls of the 1990s, isn’t so bullish anymore.
If the Dow Jones Industrial Average drops below its Nov. 20 low of 7,552.29, it could hit 6,000, Acampora, he tells Bloomberg News. Acampora retired from Knight Capital Group in October 2007 after working for 40 years on Wall Street.
The Dow last stood at 6,000 in October 1996.
“Hopefully we don’t make new lows, because if we do, all bets are off,” Acampora says.
Both the Dow and the Standard & Poor’s 500 stock indexes recorded their worst years since the Great Depression in 2008. The S&P 500 hit an 11-year low of 752.44, while Dow’s Nov. 20 low was its worst position since 2003.
Acampora, whose Wall Street stops included Prudential Equity Group, Smith Barney and Kidder Peabody, says that while the past two weeks are “very disturbing,” he’s still “willing to give it the benefit of the doubt.”
The positive signs are that the market has rebounded a bit and that the market has positive breadth, meaning rising stocks outnumber falling ones.
Even if the market doesn’t plunge, stocks are probably just range-bound for the next four years, Acampora says.
John Murphy, chief technical analyst at StockCharts.com, agrees with Acampora about the importance of the November lows.
“If that’s broken, it becomes very negative,” he tells Bloomberg.
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