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Mix-Ansicht- Dr. Stool zum DJI - black elk, 19.05.2001, 11:38
Dr. Stool zum DJI
Dow Jones Industrial Average Chart
Friday, May 18, 2001 09:20 PM EST
Inmates In Charge (5/18/01) Bulls are using the Dow to give bears the finger. In technical analysis terms, the chart pattern is known as the rectal exam formation. Dr. Greenspurts stuck his finger in there and the institutional portfolio shrinkers had a reflex. They jumped so high, you can tell from looking at that chart how much they liked it. The thing is, the Dow is the only chart that looks that way. The business about the market broadening out is your usual weekly load of crap from the poodits.
So Monday's the day. The money mismanagers will do their damndest to push this thing through the September high of 11,400. That's the sobriety test for this market. There will be a battle up here, and assuming cooler heads prevail, bears will win it.
Think about this for a minute. The Dow is in the same trading range it has been in since March of 1999. It's now near the top of the range after a nine week long institutional mania. The inmates are in charge of the asylum.
During the last great cyclical bear market from January 1973 to December 1974, the Dow put on a similar act. The rally began in late August 1973 and lasted 10 weeks. The 11 week stochastics stayed overbought for the last 5 weeks of the rally. The Dow raced through its 200 day moving average, broke the previous tops in April and July, attacked the 1000 level and convinced everybody, including a certain young trader whose name we will not mention, that the bull market had resumed.
The point is not that everything is the same today. It's not. Fundamentals today are probably worse, what with the Fed driving us toward a scenario where a loaf of bread costs $1,000. It's called the Weimar Republic. But hey it's only plastic right. At least we won't need wheeled carts to carry our cash around. And who cares anyway, as long as the value of my house and my salary keep up.
So yes, the point isn't that this rally will have the same outcome as that 1973 rally. The point is that when there is an overwhelming consensus among the whoremongers and pimps on Wall Street, that consensus is usually nothing more than wishful thinking and mass psychosis. Like I said, the inmates are in charge of the asylum.
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