"The trend is your friend" or, in this case, the market's enemy. You may have noticed lots of vacillating in the traditional financial press this past week - gloom and doom after the market closes lower, supreme optimism the very next day when the market moves higher. ChartWatchers shouldn't be fooled by the media's need to generate market opinions that sell papers. The market's trend has been clear for weeks and despite what the optimists say, that trend is down. The Dow chart shows it clearly with three lower peaks separated by two lower troughs. Last week's third peak is the "final nail in the coffin" - confirming the downtrend beyond a shadow of a doubt. Don't fight a clear trend folks. Until a clear up-trend is re-established (see this article for details), the default expectation for stocks should be that they will move lower.
