Dow closed below 8,000 - what does this mean for the market?

MNSL answered one year ago …

If it does not rebound back to above 8000 level within next week even it can go down to below 3000 level in the worst case scenario. Derivative markets including options also will become inactive and some equity derivatives will become too expensive to be used as insurance against stock losses.

So far there was combined worldwide interest rate cut, stimulus packages and bail outs. Still market did not response positively. Therefore, I think if they do not do any bailouts in the future market will reacts positively.

In addition rather than implementing job cuts governments and private sector should take steps to increase employment opportunities. Otherwise there will not be any demand for cars, electronics and other products. More companies including car and tyre companies will become bankrupt. Where do we going to get consumer spending power? If consumer can stop buying things what will happen to companies that producing products and services to the consumers. It is alarming to see now in some courtiers now consumers do want to take insurance policies including car insurance polices. In a way they are right.

More than bailout there should be positive sentiments and confidence towards market players and financial world.

However current mess will make some sectors more attractive in the next decade. This has made some new players to become more active now. If we can identify those areas in advance we can survive.
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