Change of pattern in the Dow

Posted on Dec 16, 2009 by in Letters

Since July the Industrials have exhibited the wave pattern we have called "surge, drift and flush".  This has been very descriptive, and useful.

Now the pattern appears to have changed.  The present pattern developing after the last surge has passed beyond drift into an uncertainty pattern perhaps better described as a rectangle.  Except that it is very unruly with some broadening aspects.  And daily range has shrunk noticeably.  This shrinkage, or coiling volatility will soon beget explosive volatility.

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