10/22/2012 Futures


10/19/2012 Closing Prices


Following Friday’s 1.5% sell off (Nasdaq lost over 2%), there was a bubbling of concern that today could be another Black Monday.

The futures suggest that, at least as of the open, today is no Black Monday . . .

Category: Markets

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2 Responses to “Today is Not Looking Like a Black Monday . . .”

  1. Black Monday was preceded by a Dow Theory signal on 10/15/2012. So a primary bear market was signaled some few days in advance.

    A look at the 1987 charts shows that the market was technically much weaker than now:


    By the same token, in 1929, the big crash came after the primary trend of the market had turned bearish.

    So in most instances (nothing is carved in stone. Rule 11: flexibility), a crash is preceded by a very weak technical condition of the market which in Dow Theory is signaled by a primary bear market; not a mere correction.

    Currently, the primary trend remains bullish in spite of the ongoing correction. So the odds don’t favor right now a crash, but rather the completion of the current secondary reaction and a new upward primary swing.

    70% of primary bull markets end up with profits, so the odds favor a rising tide rather than a crash (which would imply losses and a failed Dow Theory signal).


  2. Squashy says:

    The futures prices listed here for 10/22 are lower than the closing index prices on 10/19. What’s the deal? thx.