Scary Picture

Yes, we do appear to be in rally mode, at least for now. This could go on for a while or it could end tomorrow.

The $200 million man has been out of action so far this week. He had been in a down position at the end of last week.

The Nasdaq 100 numbers for the last five market days (dividing positive numbers by negative numbers):

1.41, 1.54, 1.43, 1.47, 1.66

So again, I am wondering if that was an important low that we had this past week or so, when the Nasdaq number got down to near even money, positive versus negative, or whether there is more to go. Obviously some day I'd like to be able to answer that based on these numbers, but I can't say right now.

I do have a very scary picture to pass along. I was wondering what the Dow was looking like in a long-term historical perspective, and I found the perfect chart, going all the way back to 1900. To me, this is an unbelievably scary picture. There it is, in all its glory, the most awful-looking giant head and shoulders you're ever going to see that we have formed since 2000. From all I learned from Jerry Favors, most of the mountain in the chart is going to come crashing down, probably starting very soon. We could go up and rally for a while. But as long as we stay below the all-time Dow high of 14,000-something, the head and shoulders will be intact, ready to explode down. It could start tomorrow, or it could start months from now. I hope and pray that I'm totally, completely, laughably wrong.

That chart is at: http://stockcharts.com/charts/historical/djia1900.html

If a total crash starts, my numbers will be useless, I'm guessing. This will be a pattern-driven thing that's going to play out no matter what the numbers are.

Rob