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Bad News For the Dow (Short Term Bear Fest)

Finance Comments (4)

As I write this, the Dow is 47 points up. I would expect it to close down for today. Yesterday was a key reversal day, a technical signal traders pay a lot of attention to. A Key Reversal Day is when the market makes a new high, reverses and closes below the previous low. If today’s close is down, expect a down Monday as well.

The Wall Street sponsored media should start next week pandering bad news and creating a climate of fear using the available examples of very bad October markets. Expect myriads of articles about 1929 and 1987. This climate should keep going to pressure the Fed to cut rates during the next meeting. The Fed should oblige preparing the stage for runaway inflation.

1st Update 2:15 EST
Yahoo publishes the article Prepare for the Crash at Motley Fool (Fri 1:12pm). The funny thing, this is not even a new article: it is a reprint of a 2005 article.

2nd Update 3:35 EST

With less than 30 minutes to the close it does not look like a down close day. The Dow Jones will need to close above yesterday’s high to erase the Key Reversal signal.

Final Update 4 EST

The Dow closed up but still needs to close above 14,101 and later 14,200 to erase the bad vibes.


Remember this is not financial advice. For more disclosures please check the About page.

Franklin @ October 12, 2007

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