He’s basically acknowledging one of the more drastic scenarios floating around in the financial ether that the Dow could retrace and give up everything gained since its 2002 low. Such a move would be a 100% retracement, whereas a normal retracement is only 50%. It’s not unreasonable with the depth and breadth of the crisis, but I think unlikely.
What Cramer (who is indeed a contrarian indicator) forgets is that there is nothing keeping anyone from modifying the components— the 30 stocks— which comprise the Dow. Don’t like the results, fudge the numbers...AIG, a Dow 30 stock at the onset of the crisis, has already been replaced. Ditto for Wamu, Countryside, Lehman Bros. in the S&P500.
Short selling resumes tomorrow (unless Uncle Sugar and his buttboy Jorgito step in again) and the pressure will indeed be down, which will be followed, probably on Friday by that most inevitable consequence, the “short squeeze” where shorts are compelled to buy shares to cover their positions, creating artificlly high demand for shares of the affected companies. Pop to the upside.
I believe that I heard some time ago that it was extended until the 19TH.