Okay, let's all be honest -- very honest. Yesterday (April 15th), I didn't think there was a chance in hell that the Dow Jones Industrial Average was going to close up. I know that I had this theory about the power of the three-day DOWN pattern, but, geez, that's just one of those idiotic technical analysis thingies and while I call it a fun "toy" for taking the market's temperature, well, you know, there was no way that the Power of Three was going to deter the inevitable. Who knew. Maybe I should put this thing away before it becomes a tool for evil and the darkside?
If you are new to this thread, you can pick up the trail here:
In response to a number of queries and comments, let me once more stress that I am NOT trying to predict the closing price of the DJIA--and I am certainly NOT suggesting that the recent so-called bullish trend is a buying opportunity, the beginning of a Bull Market, or a trap for the unwary. Far from it. I am merely trying to develop a reliable thermometer to measure investor sentiment for this current market uptrend, which I arbitrarily say started on March 4, 2009. For a number of weeks, some market prognosticators have beaten the drums of doom and predicted another massive leg down or worse. For the near term, they have all been wrong. If nothing else, the market has merely slid sideways while they pointed to the nearest exit and urged you to make haste. On the other hand, for those of us who remained skeptical of the chatter and held tight,or picked our spots, there have been recent profits or reduction in losses.
I believe that as long as we have no more than two consecutive DOWN days, that the current trend is still to the upside. Once we experience three or more DOWN days in a row, that would suggest the current run has weakened, if not ended.-- as to how long a correction or its severity...sorry, I'm not in that business of reading the guts of disemboweled doves. I'll leave that nonsense to other would-be pundits. Simply put: Until I see three consecutive DOWN days in a row, I'm not convinced that we're undergoing a correction to the recent market recovery. When I see that trifecta, well, that's going to get my attention and I may close positions, cut losses, or take profits.
So, if nothing else, we have at least another three trading days before we may have to do a post-mortem. On the other hand, we have at least another two days before we once again need to bite our nails.
Best of luck to all!
And here's a fun little video tidbit for those of you who still like surprises -- even something more than mere three-day market trends.:
STREET'S LEADING ONLINE COMMUNITY