Clues abound that Friday's selloff is unlikely to turn into an avalanche next week. In the first place, if investors had reacted rationally to the day's horrific unemployment news and soaring oil quotes, the Dow might have fallen 800 points rather than a mere 400. The fact that bulls even attempted to rally stocks about two-thirds into the session attests that they still don't get it. More than a few of them evidently believe the U.S. economy will experience either a shallow recession or none at all, and we should therefore look for them to turn up bargain hunting next week, preventing the rout that most bears are probably expecting. We wouldn't be surprised if by week's end the Dow Industrials had traded no lower than 12032, a Hidden Pivot support that lies just 160 points beneath Friday's bottom. We plan on bidding cautiously there ourselves, using a tight stop-loss. We are no bulls, to put it mildly, and we'd be dumbfounded if the Dow has not shed a third or more of its value by year's end. Panic selling will help get it there, and quickly once it begins, but investors do not yet appear to have reached that point. Nor does one of the stocks we love to hate, Citigroup, seem quite ready to initiate its death dive. Citi settled on Friday at 20.05, down nearly 5% along with quite a few other financial-sector biggies. Just a week ago, we e-mailed to those who requested them a series of bank-stock charts that showed why we think Citi is bound for at least $10.05. But for now, we're advising subscribers to bid cautiously at a Hidden Pivot support that lies less than $1 beneath Friday's low. Apple Foie Gras And then there's Apple, which seems like it is being groomed by
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