Open Your Envelopes
Last Friday’s reversal lows in the
Nasdaq Composite
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)? Broken. In the
Dow
Industrials
(
$INDU |
Quote |
Chart |
News |
PowerRating)? Also
broken. In the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)? A spit
away from being broken. We are
breaking everything, including the china in the cupboards. Â
I’ve come to the conclusion that the reason this market keeps going down is
that most people are not opening their mutual fund statements. They just pile them up in a corner somewhere, watching them collect
dust. People are hoping for a
bottom. Hoping and hoping, and
still more hoping.
Remember the ominous looking monthly charts I posted in
my May
16 column? Keep those charts in mind.
Some,
like International Business Machine
(
IBM |
Quote |
Chart |
News |
PowerRating), have already begun to crack. Others like
Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating), are j-u-s-t barely holding on. In fact, PFE got slammed today, down a couple dollars on big volume. Take a good look at that monthly PFE chart. What does classical chart pattern analysis tell us about a break of
support here? I’ll save you
from reading Edwards & Magee — the potential downside target after
breaking through the neckline of a pattern like Pfizer’s is about 25
dollars.
Â
Will the market implode? I have no idea. However,
we really should start a national campaign to get people to open their
envelops in my opinion.
Have a good weekend.