CLIFF NOTES: the most important pattern in the history of the US stock market was hit today. Period.
- all time low on Dow Jones Transportation Index was 49.59 on 10/29/1896
- that low when used as the key node for retracements was responsible for the LOW in 1987 (.382 retracement ), the LOW in 2003 (EXACT 50 percent retracement) and the LOW in 2009 (EXACT .618 retracement).
- it was also the beginning of the projection for the high in 2007.
- now, currently, the 1896-2007 leg is projection to an area EXACTLY to where we close today …additionally a 1.618 extension from the 2007 top is at the exact same area.
folks, I incorrectly assumed that a top had been made in the transports when we went down 4% in one day. figured some slippage or something like that. well, it kept going up and, guess what — it went up and smacked (today) the ONLY PATTERN that can be complete using the all time low.
the market is so beyond thunderdome that I expect it to get crushed and the band will simply play on and on and on …but the prudent investor, trader, institution would BAIL AT THE FIRST HINT OF A WEEKLY SELL SIGNAL …
one last – these numbers we are dealing w/ have their genesis from the all time low in the Dow Jones Transports some 42887 days ago. what does that mean? well, it’s a big flipping pattern that completed today is what it means…you can argue if it takes into account inflation or stock splits or any of that other stuff … none of that matters. Look at the chart and there right in front of you is the retracements and projections.
that 49.59 has been responsible for EVERY major high and low in the history of the Transports …