The Dow opened Friday at six-year closing low and down 47% from its all-time high. Following the path of international markets, the index declined early Friday, trading as low as 7328 before rebounding a bit; in recent trading, the Dow was down 1% at 7395.
With the November closing and intraday lows now having been breached, the next major resistance level for the Dow is its Oct. 2002 low of 7286; falling below that would put the index at an 11-year low.
Faced with those grim realities, long-term "buy and hold" investors are now understandably asking: Is it too late to sell?
The answer, of course, depends a lot on your time horizon and risk tolerance. The stock market is now at "fair value" based on the S&P 500's long-term cyclically adjusted P/E ratios, but history suggests major averages will far further before this bear market ends.
How much further remains to be seen, but signs of "capitulation" do not preclude further losses; from 1929-1932 the Dow lost 90% of its value and Japan's Nikkei today is more than 80% below its January 1990 peak.
Meanwhile, renewed fears of bank nationalizations and this week's earnings miss from previously bulletproof Hewlett-Packard are so far preventing even a short-term recovery effort.