burt wrote:For sure, so this was NOT my question, my question was: what did you observe special on Thursday on the Dow?
Apart the fact there was a recent non-confirmed Dow non-confirmation, point which doesn't mean anything yet, I haven't seen anything, so for my own culture, and if you agree, could you explain.
That's correct, this has nothing to do with Dow Theory. Dow Theory only says the market has turned down after it has already happened. I'm looking at what markets do and when they do it before they crash. What they do has to do with the patterns they make on a day to day basis. On Thursday a pattern was completed that is similar to the pattern that was completed before the 1929 and 1987 crashes. In some ways, it is a mirror reflection of 1929 and 1987 because when markets show signs of panic, they can change polarity as a short covering panic occurs, then reverse polarity as a selling panic starts. On Thursday the Dow also completed a a cycle in time that was within one day of the completion of the Tulip Mania in 1637. To study this, it would be best to use a daily candlestick chart of the Dow from 1929 and 1987 and study what happened before the crash. It would also be best to not only study it on the basis of our calendar system but other calendar systems as well.
I think another important thing to think about is whether any of this is being confirmed by other observations. An easy one would be going back to May 5, 2010, there was rioting in the streets of Athens, Greece and the flash crash occurred the next trading day. On Friday, we saw similar in Cairo, Egypt which could set up another crash in the US exchanges on Monday. That may be the fundamental situation that is showing up in the chart pattern. Rioting is an action that may be similar in some respects to stock market panic.
burt wrote:Another point for my own culture, why do you say the market shouldn't delay 2 months more. Because you follow some theory about the cycles? I followed theory on cycles in the past, but for the short term (I mean between 1 week and 3 month) I havn't found there anything very usefull. Mabe I took the wrong references or didn't study hard enough.
That's not really what I was thinking of, but there was a cycle I observed that might merit some consideration. The number of days between the 2002/2003 (July to March) bottoms is very close to the number of days between the 2007 (February to October) highs. Likewise, the number of days between the 2008/2009 (October to July) bottoms is very close to the number of days between the April 26, 2010 high and last week. But the real reason I'm thinking that is not because of the cycles. It's because of all the various things we are seeing that indicate the periphery is once again beginning to collapse. This would be the same type of thing I wrote about in this forum on April 26, 2010 but instead of involving just Greece it involves many more areas on the periphery and it is spreading very quickly and unpredictably (small countries, states, local governments, and individuals). In order to keep the center of the system afloat, resources are being sucked from the periphery of the world into the center. As the periphery collapses, the center can't hold either because it runs out of resources to suck in. However, with the heavy government involvement in the markets, it's a lot harder to read the situation. It's like trying to monitor a backyard pond that had fish in it and now there is a whale in it.