DOW update monthly
The monthly chart shows clearly that the 1,5 year uptrend (wedge) has been broken and turned and in a bigger context after not being able to reach the old highs from 2007 that is bad news for the next years as we need to retest the 2009 lows basically. For now medium term a test of 9500 is a mandatory exercise within the next 6 months we will reach that target as early as DEC 2011 is a high probability though. Selling rallies remains the right thing to do although we have reached extreme bearishness by some indicators we do not have any capitulation so far as most pundits on the propaganda shows keep telling how cheap markets are. Ironic is rather the real power markets in asia and especially the former titan ( 20 years ago) Japan who has zero interest along the yield curve for 20 years now is close to the all time low level . The 2 Harvards (Greenspan and Bernanke) who (have)run the FED for the same period now seem to have a problem to understand that correlation. Probably someone at Harvard should change the context of what they teach at their MBA program as all alumnis seem to have a problem understanding economic patterns very impressively proven by Wallstreet. Common sense is after all the most powerful concept and the world economy is running on printed money which loses value by the day. From now on til mid Oct we rather are in a downside move which will be interrupted by a window dressing action in a weeks time. 11000 is an important support as the current consolidation wave 4 support is around that level now once we take that out the target will be 10000 defined by the pattern of the consolidation. That is the target of wave 5 and pretty much a capitulation move , could be reached around mid October. also the bond charts suggest we need 2 more weeks of rising prices. From that level we will see a sharp counter rally of 10% at least as the ABC correction should kick in. That we will discuss once the lows are in now we have a strong indication confirmed by astrology that next week will be ugly on the downside despite the attempt for window dressing actually one part of window dressing will be that people will need to get rid of financials as they will lead the way down.