DJIA

open 10,631.82

close 10,378.83 down 265.42

day high 10,631.90

day low10,367.33

today's volume 216,390,518

3mo avg. daily volume 219,867,588

DJTA

open 4,449.17

close 4,262.24 down 189.89

day high 4,449.17

day low4,240.14

today's volume 16,618,604

3mo avg. daily volume 21,386,961

The last two days volume has approached something a little more "average."  The markets had gotten so bored it's nice to see some interest, however childish it may be.  I equate today to a spoiled child holding his breath until mom gives him his candy.  Not getting the QE that was hoped for the market responded by telling the fed just how scary deflation seems and that if  the fed is not going to run the presses then Wall Street isn't going to play along.  Deflation has the potential to shift drastically and quickly to an inflation or hyper-inflation, we're just not there yet.

I am surprised by gold holding at $1,200 (or just below).  I traditionally would have assumed a market move like today would have some effect, but nothing-doing.  Perhaps the stand-alone store of value has become stand-alone once more.  The USD  index jumped up almost 2 today, it was certainly due, trading at the low end of it's 200-dma for a while now, but it is still lagging compared to the Euro.  There may be an excellent exit point from the dollar into the Euro coming, but I'm no currency trader, so I'd have to spend some time picking my targets... if I were so inclined. 

If I were a betting man...
 
With increasing volume on the declines and no new highs being made, one can assume the continuation of the slow drudge downward.  I still don't know if we'll see any major spikes down in potential investments outside of a liquid cash position, or preferably physical precious metals.  I'd bet on a measured increase in the dollar coming with no great FOMC announcements from yesterday in the short run with a play into the Euro before the bottom drops out.  The bottom will drop out of this eventually, I just hope it is further down the road that it would otherwise look right now... below is the Industrials chart where I'm seeing similar movements over the past three years which I've circled.  Noticing both price changes and volume changes.  If this is Dow Theory, than we are still waiting for a few key indicators, but Dow Theory is not the god of the markets, only one of many tools.  Other tools worth having in your kit include understanding of GDP, lending rates, employment figures, and a little common sense.