Jun 302010

The Grand Daddy of technical analysis, the Dow Theory,  indicated that the US markets have slipped into a primary down trend - in other words known as a bear market. The Dow Industrials closed below its May trough of 9810, a day after the Dow Transportation Index closed below its May trough of 4034. I'm not even going to bother with the charts as I'm sure the internet is filled with this news.

In this process, US markets have also completed the H&S pattern we highlighted in our June 15th post https://www.cashthechaos.com/blog/?p=261

In the extreme short-term, US markets could be in for a bounce as the Nasdaq has had 8 consecutive down days and the Dow and S&P 7 down days in 8. While such a bounce is not a guarantee, if it occurs, it would be an opportunity to get short and get out of longs positions if any.

Indian markets which have shown tremendous resilience and outperformed world markets so far, may not do so for long.  Expect more intense selling pressure next time Nifty trades below 5259.

  One Response to “Brace yourselves – the grizzlies are back”

  1. Cant agree more. The market moves, the fundamentals , the volumes and more importantly the MARKET PSYCHOLOGY all point to a disinterest towards Equities. The VIX doesnt create panic, awe,but fear of unusual losses. And when participants stay away, and there is no trigger for any upmove the fear will grip and the grizzly shall have the laugh. Nandi for mine, is compassionate towards its kind brethern. Sarve Jana sukhino bhavantu,

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