The Dow has fallen roughly 340 points since election day. I woke up last night and thought of the law of alternation, a law that I used to employ in my market analysis.
The 2008-09 bear market decline was swift and violent. It was over almost before most investors knew what had hit them. According to the law of alternation, the next bear market decline should be just the opposite in character of the 2008-09 decline. The next decline should be slow and lazy, with stocks sinking in a deceptive, leisurely manner, sinking in a lazy way that scares nobody.
The latest Lowry statistics shows Selling Pressure Index (supply) still dominating Buying Power Index (demand) by a wide margin. This means that any decline in volume will send stocks lower.
It's a bit disappointing to see distribution days appearing right after the latest rally. As for the latest rally there were two ... Log in or subscribe to continue reading.
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