I’ve been calling for a drop in the Dow since the beginning of the month.

Back on February 2, I told readers this: “If the VIX is rising, that means the Dow should be falling, possibly breaking under 8,000 sometime in the next few weeks and heading towards 7,000.”

And Crisis Strategy Alert, a new crisis investing service (published by the same guys who put together ContrarianProfits.com), has helped our subscribers make 20% profits on the Dow’s slide. (They are still banking coin!)

But is the Dow going to keep dropping? Let’s take a look…

This is a 12-year monthly chart of the Dow Jones Industrial Average (DJIA).

Notice how steep the most recent fall was.

Also notice how the DJIA recently broke under its 2002 bear market lows.

That means had you invested in a Dow Jones index fund back in 1998 your account would have LOST MONEY after inflation.

That makes this one of the worst investments known to man.

And it doesn’t seem like the pain will end anytime soon.

Above you’ll see that 7,000 is a major psychological support point.

Why?

Because it’s a round number. And because the DJIA has traded close to that level in the past.

Today the DJIA is about 100 points away from this mark.

So here’s what I suggest you do.

If you’re already short the Dow via an ETF like the Diamonds Trust (NYSE:DIA), then hold onto your position.

If you have not yet entered into a short position, then wait for the Dow to break under 7,000 before getting involved.