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.
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This article is part of the series "Exercise in Market Timing"
- Expect increased volatility
- And we got increased volatility
- Bad News For the Dow (Short Term Bear Fest)
- Dow Jones 400 to 600 more points of pain
- After exiting two weeks the Dow Jones goes nowhere
- Dow Jones at 13,300.02
- Dow Jones at 13,099 should see a rest
- Dow Jones Finds A Convoluted Way to Do Nothing
- Dow Jones Ready for Next Leg Down
- Dow Jones 13,252. Not All Clear Yet
- Dow Jones: Announced 2-day Pullback Over
- Timing The October High And November Bottom Of Dow Jones
Franklin @ October 12, 2007