Dear Subscriber,

This is a very important column. So please be sure to read it in its entirety.

In my June 20 column, and again on June 27, I made it perfectly clear to you that the U.S. economy was headed for some very tough times.

I also gave you my signals to watch for key markets, starting with the Dow Industrials, where I warned that its inability to get above the 12,800 mark meant we would soon see the broad stock markets rollover to the downside.

I gave you the following signals to watch in the Dow ...

This week, we saw exactly that, the Dow Industrials plunge, smashing the first signal at 11,542.62 — generating an important weekly sell signal — and falling all the way to 11,380 as I pen this column ... just 30 points above the 11,350.27 support level.

In total, we have now seen the Dow Industrials plunge more than 1,500 points since its May high, a whopping 11.6% plunge.

It's not over. While there might be a bounce this week, all of my indicators suggest, at a minimum, the Dow may plunge to the 10,567 level, with the distinct possibility of falling to 10,386.

IMPORTANT: If the Dow closes below 10,386 at any time — the Dow will be in a position to collapse to 9,034.

That IS a possibility. But much lower than that is now. And you should also know that if the Dow does fall that low, it will be one heck of a buy — a great time and price level to position yourself for the next major leg up in stocks, which will ultimately find the Dow Industrials making new record highs.

Why? Because at around Dow 9,000 — that will be the point where the Federal Reserve and Mr. Bernanke come in with all the other ammo they have at their disposal. The ammo I wrote about in my July 18 column.

It is where the Fed will bring out QEIII, which will include buying stocks, commodities, corporate bonds, even real estate, slashing reserve requirements, and even penalizing banks for not lending to the economy.