Another Reminder From The Dow Theory

The DJT has been quite weak in the last couple trading sessions. Today, it hit another new low and this serve as a reminder to all market participants that a new low for the DJI is coming. The DJI attempted to rally back up to the 7500 level after it has broken the Nov. 20, 2008 low, but encountered strong resistance at the 7400 level. The SP500 also encountered resistance at the 780 level in this oversold rally and currently sitting near the Nov. 20, 2008 low. The Nasdaq 100 is sitting near the range bounded lower trendline. All these three indexes appear to be getting ready for the next down move.








Tomorrow is the last trading day for the month of February. Unless the DJT turns around while the DJI makes a new low, it will be another February that the market won't be making a bottom. Based on the breakdown in the big oils when the last new low was made, I expect these big oil companies such as XOM. CVX will continue to play a major role in taking the market lower. Depends on what Washington decide to do with the banks, the financial stocks will continue to be volatile until clarities and details for the plan are presented to the market.

March could be another disappointing month for those that are looking for a market bottom. Going back 30 years, I can only find two instances where the yearly low or a major low was made in the month of March. I will continue to monitor for trading opportunities on DXD, SDS, QID and GLD. I will shy away from the mining stocks or the mining stock ETF GDX. I will make a separate post this weekend on gold.