We have always had our eyes on that little known Nobel Prize category — the mixed metaphor prize. We probably have the inside track on it, but you never know. Our old college classmate and friend Fischer Black had the inside track and blew it by dying. (Just a minute here. We’re checking the old heart monitor…) The Dow is racing along the razor’s edge here and is approaching a tipping point.
There is only one possible interpretation for what is going on — a bottom is forming. Well, maybe two interpretations — a consolidation is taking place in a downtrend and the downtrend will continue. We present both interpretations because analysis is a two edged sword — if not more edges, and also a point.
But enough of that. No more playing with the reader’s emotions.
We think this is a bottom forming and that the lows will hold. What makes this difficult is the extreme volatility caused by news events. Flash traders, contrarians, Goldman, market mischief makers who profit from volatility trading take advantage of news events to drive the market up and down. And they could drive it over the edge (razor’s).
But the bottom appears to be holding, and the pattern (hourly) appears to say to us that it will hold.
If the number is disconnected when you call it’s because we went to Brazil. Unfortunately there were no significant funds to defalcate with, so we’ll be making a living as a fortune reader or a samba dancer.