Big trouble confirmed today
Today was an very important day in the markets. Can you guess why? Take your time. It might rhyme with, say, Mrs. O'Leary's cow. O'Leary's cow.....O'Leary's....cow......theory...dow.......dow theory! That's it! Dow Theory!
Ok, that's the best I could come up with this late at night (10:15 p.m.). But just as Mrs. O'Leary's cow might have started the Great Chicago Fire, today "Dow Theory" might be warning us of a different kind of fire. A stock market fire that could seem like its burning everything to the ground.
You see, todays close by the Dow, joining the Transports below the November CLOSING lows, has generated what's called a re-confirmation of the Dow Theory primary sell signal that was triggered in November 2007. This pronouncement comes after consultation with my good friend Tim Wood, one of the two best Dow Theory experts on the planet. (The other is the famous Richard Russell, and if you don't believe me, go ask Richard)
This is not good news for the bullish case. It's telling us that we're not staring at a double bottom formation, rather we're staring into the abyss. At least it'll seem that way.
I must say I'm surprised. It's shocking to me that a market that's declined 53% percent from top to bottom can only muster the weak rally attempts we've witnessed. This is MUCH weaker action than the move into the spring of 1930 after the 50% 1929 crash. Much weaker. Could it really be that bad? Could the market really be ready to launch into another massive decline from here? It's beginning to look that way, and Dow Theory is screaming at us that it's more than possible, it's probable.
If this is correct then we may be about to witness the first true panic of this collapse. Don't ask me to quantify "panic". You'll recognize it if it when you see it.
So be careful in here. There should be a move higher shortly as the market tries to disprove what I'm writing about. Of course I've been looking for that elusive move for a while now and it hasn't shown up. Anyhow, Dow Theory, that's what you need to know about tonight.
Ok, that's the best I could come up with this late at night (10:15 p.m.). But just as Mrs. O'Leary's cow might have started the Great Chicago Fire, today "Dow Theory" might be warning us of a different kind of fire. A stock market fire that could seem like its burning everything to the ground.
You see, todays close by the Dow, joining the Transports below the November CLOSING lows, has generated what's called a re-confirmation of the Dow Theory primary sell signal that was triggered in November 2007. This pronouncement comes after consultation with my good friend Tim Wood, one of the two best Dow Theory experts on the planet. (The other is the famous Richard Russell, and if you don't believe me, go ask Richard)
This is not good news for the bullish case. It's telling us that we're not staring at a double bottom formation, rather we're staring into the abyss. At least it'll seem that way.
I must say I'm surprised. It's shocking to me that a market that's declined 53% percent from top to bottom can only muster the weak rally attempts we've witnessed. This is MUCH weaker action than the move into the spring of 1930 after the 50% 1929 crash. Much weaker. Could it really be that bad? Could the market really be ready to launch into another massive decline from here? It's beginning to look that way, and Dow Theory is screaming at us that it's more than possible, it's probable.
If this is correct then we may be about to witness the first true panic of this collapse. Don't ask me to quantify "panic". You'll recognize it if it when you see it.
So be careful in here. There should be a move higher shortly as the market tries to disprove what I'm writing about. Of course I've been looking for that elusive move for a while now and it hasn't shown up. Anyhow, Dow Theory, that's what you need to know about tonight.
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