Not that I put much stock in chart patterns....but the Dow & the S&P look like they may be forming a head and shoulders top. Europe sure doesn't show any sign of slowing though.

Gary

Gary,
This stuff for me is like a Rorshach. Can you be specific about where you see the left shoulder, the head and the neckline?
Thanks, I'd like to see it,
h

Well like I said I don't put a lot of stock in patterns mostly because you can create all kinds of different patterns by changing the horizontal and vertical axis, but it looks like the Dow formed the left shoulder from the middle of Nov. to the first week or so in Dec. then the peak right around the end of the year and now for the last week it looks like we may be forming the right shoulder. I'm probably just halucinating, I've had one to many frothy ones

Gary (hic)

Check out OSTK.
H/S pattern with neckline around 53.

Speaking of a Head and Shoulders top, check out my post on the banking index...

http://ldholmes.com/password/smrdaily2-10-05tenyear.htm

And remember this is happening while interest rates are dropping like a rock. Why aren't the banks going up? One reason may be that the yield curve is flattening. And banks make their living by borrowing short and lending long. A flattening yield curve is another negative for the stock market.

Thanks to Helene Meisler of RealMoney.com for calling this to my attention.

Larry

Larry,
What's that daily report?
h

Howard,

Just trying to find a way to post things in a more timely manner when I see them.

Larry

I think the daily report is a great idea.

thanks Larry

I second that!!

On a different train of thought the dollar got overbought and ran into resistance at the 85 level. It may be headed back down. I'm wondering if the market will now head back up as the dollar heads down like it has for the last year or so. At first glance the market seemed to find support as the dollar neared the 85 resistance.

Gary

Yes, Gary, if things follow the pattern of the last several months the market may rally as the dollar falls -- especially the big international names. That relationship will uncouple eventually, but who knows when.

I remember Russell writing a long time ago that the Dow could make a new all time high and he'd still view this as primary bear market. I'm beginning to see what he means. The Dow isn't that far off its all time high, but the Nasdaq is nowhere close.

Larry

Larry,
I'm just going to make a guess and speculate if the dollar breaks through the 79.12 level things might start to fall apart. What do you think?

Gary

Yeah, I think if the dollar can break its long-term support it could enter into a waterfall decline as holders of dollars begin to really unload out of fear. I can't imagine the stock market liking that. A gradual decline is one thing, but panic selling is another thing altogether.

Larry

Larry,
I like the daily posting.It will be much more timely for acting on events. I will miss the articles that were in that place. Could you find another place to put articles you've found interesting or useful?
Thanks,
h

I'll see what I can do, Howard.

Larry

Well so far the markets are behaving exactly as before. Dollar going down, markets going up. Although we did get a glimpse on Tuesday of what might happen if the decline ever gets disorderly.

Gary