DJIA

open 10,226.02

close 10,120 down 109.43

day high 10,265.54

day low10,065.50

today's volume 203,897,050

3mo avg. daily volume 237,447,005

DJTA

open 4,208.84

close 4,143.10 down 59.60

day high 4,249.12

day low 4,112.30

today's volume 20.705,782

3mo avg. daily volume 24,043,143

Today's Missive

Falling asleep at the wheel today, I was a little preoccupied getting ready for the upcoming weekend.  Never wanting to care too much about what the market does on the moment to moment basis (frankly not even wanting to care what it does on a daily basis except for what becomes cumulative and what shows momentum), I last checked prices around noon today, and was expecting a bit of a humdrum day... frankly something I don't recall in recent history, as most of our days have been fairly volatile throughout, generally starting with a early morning move and correction back that afternoon.  So about noon today when I checked last, I finally saw what appeared to be disinterest... ...when I finally got to checking the end of market hour, it obviously was a different story...

Below, a longer term look with a few things to consider.  The subsequent highs and lows are both increasing on the left, and decreasing on the right.  What is the noticeable shift from primary bull to primary bear is the portion from the last low I marked to the first high I marked.  An excessive and fast decrease after a manic push forward.  What is worth noticing is that the subsequent low does not show any increase in pricing.  Now, this cannot be guaranteed to show a transition to a primary bear, as often the secondary market moves can often appear as such.  What is noticeable now are the subsequent decreasing lows and highs, to the point now where our moving averages have crossed.  

A Random Note About the Relative Strength Index (RSI)

I've been looking a lot into RSI lately wondering how beneficial it can actually be at showing true momentum.  I'm finding it seems to be less helpful than some suggest.  I find it much more useful when comparing it to the primary trends if you lengthen the number of days used as a drawing pool to determine RS in the RSI equation from the typical 14 out to 30.  At 14 days, I think I would have lost far more money than I would have made over the past year.  No one claims RSI is the stand alone means of timing, but of course no one would say that about Dow Theory itself.  

My recommendation, learn all you can about all you can, a good hunch after you know all the empirical data, and perhaps a good understanding about politics (as, unfortunately today politics has a lot more to say about the markets than an Austrian Free-Market Economist would want) and human nature may serve you best... perhaps the best traders should have psychology and sociology degrees, not mathematical ones... and a little bit of business experience wouldn't hurt either.

Until next time,

slim

On a side note, if I don't get to the markets tomorrow night, please forgive, but I will be traveling to Denver this weekend for the Faith and Liberty Conference.  Key speakers include Ambassador Alan Keyes, Chuck Baldwin and  Don McAlvany.  Hopefully I'll be able to give a truncated report this weekend or next week.