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Today's Breakouts & Breakdowns

Posted, by WeeklyTA on October 3rd, 2008

This is the most depressing article on breakouts and breakdowns I have written so far. Why? Because I found no breakouts worthy of any special attention. We had only 3 new highs made today (ACC, JPM, DMND), and we made 1,076 new lows. That’s worse than yesterday’s 4 new highs and 778 new lows. You are almost guaranteed to get no major upswing at this stage of the bear market. In the third primary leg (which we are in), Robert Rhea, one of the masters of Dow Theory, wrote that this leg and the following legs contain the most violent swings in the market. He also wrote that this is the stage where most people attempt to liquidate their holdings. I follow all of Rhea’s and in 1932 he wrote that “this will continue until securities prices reflect the sum of our fears”. Sorry folks, we have not reached that level yet.

Authored by, WeeklyTA
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