Anybody can just throw some number out there, but realistically what are we looking at here? I believe a good estimate to be around 6600 level, which would give us at least another 1000 point drop. Within this time, what are traders to do?

For the most part, we all have three options:

• Go long
• Go short
• Go cash and go home

Obviously everybody has their own idea of what is going to work. Everyone has different time frames, risk ability, and capital. A big problem though, is that most traders have very little experience with this specific type of market. We are not in any regular bear market. Things are not going to be better next week or in the next months. There are just too many problems with the economy for that to happen.

A common theory many traders use is to capture 70% of a move. You would like to be trading within that middle spot, and if you make enough in the middle then who cares about the tops and bottoms. Forget picking up the 15% on the top and 15% on the bottom, it doesn’t work consistently to use it as a trading strategy.

Here is a great video that details the above strategy, and also contemplates how low the dow can go.

Just looking at the chart of the Dow (INDU) is a horror movie in itself:

What is alarming is the overwhelming volume on the downward movement. Especially on the breaking of 8000. We officially moved out of that trading range.

Zooming out even further shows that we are close to another significant resistance point.

Will we break it. Probably…

So while it might not exactly be breaking news, many die-hard bulls are having a hard time admitting the fact that this market won’t turnaround as quick.

With recent techinal indicators shown by Apple (AAPL), suddenly bulls have been dying left and right. Fear has sunk in that a stock that once stood for innovation and great products is no longer safe in this market.

Roughly a year ago Apple was trading as high as $200. Current technical analysis now forecast price targets of $40 - $60!

With MarketClub, we have again put together a great video detailing the specifics of this very bearish technical indicator. You will notice the weekly continuation pattern to the downside and the fact that Apple closed at a new weekly low for the year.

General market thinking leads us to believe that a change of trend should occur once everybody has abandoned the market (ie. no more bulls left). If this stigma is to hold true, then does that mean brighter days are insight?

Probably not, but just something to think about.

Video - Bearish Technical Indicator on Apple

That being said, are the markets just hitting the reset button? Is it possible that traders will eventually be able to profit the same way as those did in the early 90’s?

Here are a couple stocks I looked at: MSFT, GE, K, BAC, AAPL, GOOG, INTC, CSCO, MER, DELL, GS. Obviously I could go on forever, but I’m sure you get the point.

There has been a burst of the tech bubble and real estate bubble. Could we just be bursting a much much bigger bubble?

I hear stories over and over about people who struck it rich off stocks in the early 90’s. While most of the people in the markets now really have no experience or knowledge with that time, could we potentially be creating another set of “bubble popping” millionaires?

So while the markets may seem bad in the short term, lets not completely throw away the long term vision, do your research and look what happened in the past, and remember that stocks can rise just as fast as they fall.

Now TiVo has taken the competition to the next level by giving users the option of ordering Domino’s pizza through the convenience of their TiVo box.

With the rapid onslaught of current media and consumer integration, it is only a matter of time before companies like Comcast (CMCSA) offer these capabilities and the selection between Domino’s and others will grow.

If there is one trend that holds true in any market, is that if something works everybody will flood the market and try to duplicate or innovate. While the combination of Domino’s and TiVo is unique, imagine how far this one little idea can run.

A good example to see here is YouTube (GOOG). With the massive increase in users and exposure the site received, in order to try and maximize profits YouTube embedded ads within the video, and they are usually related to the subject. What is stopping this process from not venturing into the television world?

If TiVo has the capabilities of connecting with Domino’s to receive orders, then couldn’t they connect with Best Buy, Target, or any other type of retailer? What if we are watching those iPhone (AAPL) commercials, and we could order it right then and there?

Usually down economies spark new innovation. More people are trying to find new ideas that work. The internet allowed us the pleasure of not having to leave the house, but now we might not even have to leave the couch.

Do you like the integration between Domino’s and TiVo? Do you see this working with other retailers? Would you even want to see it?

You may have noticed several new arenas and stadiums sprouting all over the United States. Many of them a product of the recent wheeling-dealing cycle; however, now many facilities still under construction are finding it harder to allocate the extra financing.

The moment you really know there is something wrong with the economy is when the Dallas Cowboys are having trouble with their financing.

Essentially the Cowboys are looking to refinance their previous $126 million loan, which they got through the auction-rate securities market (ARS). Basically an ARS allows the interest rate of a loan to be regularly reset. Obviously that market is now more.

Now Jerry Jones and the Cowboys are looking for some money to cover cost overruns of the team’s staggering new $1.2 billion stadium that is scheduled to complete sometime next year.

The Cowboys are looking for individual banks to buy pieces of the loan. In return, the team has pledged nearly all revenue lines from the new stadium. The team is still capable of bringing money in from naming rights and the sale of personal seat licenses.

When Jerry Jones and America’s team are having trouble getting money, then I think it is safe to say the economy is garbage.

In about two months, the United States will have a new president and it is more than likely that the problems will still be here. All this leads to three reasons why the stock market will continue to head lower:

• The trend in most all stocks is down. This trend is likely to persist and last longer than most people imagine.
• There is no plan. The government is floundering and does not have a plan that is going to work anytime soon.
• We have a lame-duck president, and nothing is going to happen of any consequence until President-elect Obama is sworn in.

If we take the first problem into account, then we can realize that most people trading the market today have had no experience in a prolonged bear market like the one we had in the ’70s. I was not even born. At the current trend of the market, it looks like we will make another new low and take out the recent lows that were put in place in early October. Unlike a bull market that constantly needs positive news to drive it higher, a bear market just falls under its own weight.

The second problem we have is that there is no concrete plan in place to rescue the economy. In fact, the domestic and global economic issues are so great that they are overwhelming in scope. The Paulson plan, which is being changed and will continue to change, is a major concern and creates significant uncertainty in the marketplace. Only when we see the new regime take office this coming January will we see any meaningful changes. Even if the new regime does any better, it will take some time before their actions take effect.

The last major problem we have is a lame-duck president. This is a major problem for the markets as President-elect Obama can not make any sweeping changes until he is sworn into office. Yes, he may hit the ground running, but the reality is, it’s not for over two months from now and a lot can happen to the market in two months. The key levels that everyone is going to be watching for are the recent lows we saw in early October. If these lows are taken out, and I expect they will be, it’s going to push this market and everything else down to new lows. It will exacerbate the housing situation, the unemployment situation and most of all, the morale of the country.

Investors of all different levels and ages are making predictions. I received an email the other day from a TWI reader, who was predicting the DOW to reach 2500. While it may seem farfetched, it is hard to disprove his estimate.

Having researched the bear market of the ’70s, I can relate how difficult the journey we face is going to be. Now this may seem like a very pessimistic outlook and in some ways it is, however there are always opportunities to make money in the marketplace. These opportunities may not be in stocks, it may be in forex or the commodity markets. Lets stay diverse and keep on keeping on.

For further commentary, check out this great video analysis of the market outlook.

It seems like every successful trader utilizes a practice or ideology from past traders and tested market formulas. Most of these same traders also gained their market knowledge from a library of books and publications written from some of the most admired traders.

Well we are in the year 2008, and how many people actually buy books now? In the age of Web 2.0, now we can learn everything we need by using video format.

INO TV boasts some of the best investing educational videos, and these lessons are being thought from some of the best and influential market traders in the business: Jack Schwager, John Murphy, Jake Bernstein, and Ron Ianieri.

Usually it would cost you a couple thousand to hear these people talk at some conference or other event, but INO TV brings all these resources right on your computer, with 24/7 access, and you can try it for free.

So if you really want to take your trading to the next level and learn from some of the best in the industry, then give INO TV a try.

TWI readers can try it for free here.

The Nintendo Wii (NTDOY), Micrsoft Xbox 360, and even the horrible Sony Playstation (SNE) all increased in sales from September.

While this news is good for the short term, it also benefits us as the holiday season has knocked on our door. With increased sales of consoles, you can almost rest assure that a healthy amount of video games will be gifted over the holidays.

Although it might seem odd to see an increase in these numbers during a rough economy, it actually makes complete sense. Nowadays, console systems have come out with several ways to entertain the whole family. You can watch movies and play games of all levels and genres.

With consumers having a hard time spending money, buying a video game console can help them save. They don’t have to spend money on gas or other forms of entertainment that adds up to be more costly.

So keep an eye on these numbers for the next couple of months and see if this trend continues.

Other popular video game tickers to watch: ERTS, GME, ATVI

optionsXpress launched a project called the Trading Quotient Test and the results show your TQ.

Essentially the test is just like any other IQ test except questions are only related to the financial markets. The faster and more correcly you answer questions; the higher your TQ. The TQ will eventually help you see where your weaknesses and strengths are as a trader.

If you are a registered user, then you can compare your score with all types of group, and even track your personal results.

Whats your TQ?