Market on tenterhooks. Whatever those are…

Posted on Oct 02, 2010 by in Letters

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=1&mn=0&dy=0&id=p40849239716&a=209481263

Notice how beautifully the top of this range is defined by the top horizontal line.  The bottom is also well defined, but not so beautiful.  Also the tenuous nature of the September trendline is obvious.  In July we had a downwave which gave us an excellent anchor for the uptrendline.  It is absolutely inevitable that this uptrend will retract, and probably soon.  It is now 25 days long.  The longer it lasts the more violent will be the downwave.  The downwave which began in April was a reation to the 56 day upwave.

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