THE MARKET FALLS PREY TO THE BEAR’S GRAVITY BEAM. NOW WHAT?
On my long list of scenarios for this week, the least favorable scenario was an expansion in downside volatility as we experienced today. I realize that we are in a time and place where volume is sparse, meaning that follow through on technically favorable, bullish patterns is hard to come by. Nevertheless, we are at THE point for the market that matters. I'll remind you of that fact by directing you to the chart below so that you can see for yourself the type of gravity the bulls are attempting to break away from.
click chart to enlarge
DOW DAILY
That treacherous pink trajectory line, born during the Great Depression, continues to grab the market by its throat, slowly digging its fingernails in until the market is forced to pop off its bull costume . It has happened six times in the past couple of years. I am hoping this doesn't turn into a seventh. Bear in mind that an acceleration away from the aforementioned trajectory is a strong indication of a new secular bull market.
Let's look at the recent price action in the Dow and the SOX:
DOW
SOX
