Just because the market broke the trend and dropped doesn't mean its going to happen again.
The main difference between 2000 and 2007 is that there was extreme irrational exuberance. It ain't so now. In fact, everyone is pretty antsy about this one.
There is either money on the sidelines or the shorts are hungry and making bets and there is a good chance they will get squeezed. Either way, it could mean the market could move higher as the shorts get squeezed big time, or people who are on the sidelines get worried about missing the ride up.
What really happened over the last two years was that everyone went gung-ho on a very short list of stocks and those stocks ended up beefing up the S&P due to the fact that it isn't equal weighted. Then fund managers bought those same stocks since they were leading the market. An observer would have noticed that a lot of stocks had been in a downtrend all year.
I do think we will test the lows. There is a chance we can go lower. The market is probably going to go sideways creating a new trend that will become apparent in 3 years.
will see end of next week when BANKS will announce their results. tighten your belt and your optimism... and try to enjoy. this is the music to help you move over it: youtube.com/watch?v=dzyT3NmNNgA :)