It's always useful to try and find a precedent to compare to when viewing current events. Over the past year I have used the 70's comparison but I'm starting to believe that template is not valid. The depression in commodity prices that has occurred over the past few months (if it continues or does not recover and that appears to be what's happening now) is quite different here than what occurred in the 70's. I was reading a piece this weekend that offers a better comparison - The Panic of 1873. There are a lot of parallels there and things to be learned as a result.

Another model that may be of interest is the parallel with the Japan stagnation that has been in process since 1989 ... almost 20 years now. That model shows that tampering with the market through fiscal stimulus and arbitrary monetary targets has done little to rid the country of the economic malaise that it still is fighting.

Now that we are entering year 2 of our own problems, how will it play out? Will it be a crash and burn or a slow bleed? So far, we are taking the steps needed to make it a slow bleed.

Now that was a melt! We saw everything being thrown out there. Is it over? Unfortunately not. We may get the one or two day bounce now, but I'm afraid given the volume trails left here we are going to come back to visit today's lows once more at least. My guess, if I have to guess, is we breach them as well.

Doesn't mean you can't make a buck in between, but gosh ... you've got to have some serious stomach for this stuff. If you can't feel certain about what you are buying at a given price point, then it's a lost cause as they are going to make you cough it up. I did some coughing on some positions myself today.

After watching for two weeks, I have started to pick on this market ... looking to enter a few names I really like as they get bloodied here today. It's not pretty and I have no idea if we are getting the intermediate term bottom here and now, but it feels so bad I have to do a little buying.

Long term ABC is finished and we have seen about 40 points of overshoot. A short term ABC targets the 1780-1770 area and may trump the long term so I would be careful buying here. Still do not expect 1751 to be breached.

What we saw over the first hour and a half was definitely panic this morning. Everything you would look for was happening. Now, we have a spike off the low. It's time to look for an entry point on the long side with some stops underneath. This is going to be a very volatile session with heavier volume. There is definitely as sense that we are coming unglued and that's when stocks are simply thrown away.

Looking for a long term wave 4 low in the 1850 area- will probably see 30-40 points of overshoot. Would not expect to go below long term wave 3 start set 8/13/04 at 1751.