Wednesday, July 21, 2010

Waiting for the Train

Dow Theorists are no doubt aware of the fact the the Transports have failed to confirm any serious breakdown of the general market. In order to substantiate the onset of another bearish decline, the Transports would have to make a new low approximately coincident with the Industrial Average breaking its recent low.
There are two levels that should be violated if the markets are going to have another impulse wave down.
  • 3742.01 which represents the 4th wave of lesser degree and the Feb 5th pivot point of the March 2009-April 2010 bull campaign
  • 3624.72 which represents the Archimedes point of the March 2009-April 2010 advance.
If and when these levels are broken to the downside the conditions will be met to usher in a further--and most likely--violent decline in equity values.

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