Everyone is wondering now if this is a V-shaped recovery or if we are going to retest the bottom (around 2200). If we retest and break through, there is a very strong support level at 1600 because that was the top of the market in 2000 and 2008. If we do see a collapse, I don’t think it will go below that level.
I’ve been seeing suggestions that the mortgage market is broken since banks are now demanding higher interest rates because they are anticipating layoffs and want to be compensated for taking on the credit risk. It could be the overpriced real estate market is very shaky here. So a collapse in the housing market could be the trigger — again.