I last wrote an article on Friday, November 9, as the Dow Jones closed with a value of -3.13% in the BEV chart below. Three Friday’s later and the Dow Jones closed today with a value of -4.81%. Not much of a difference, until we note between these two Fridays the Dow Jones almost broke below its BEV -10% line only six NYSE trading sessions ago, last Friday November 23.
Then, beginning Monday this week the Dow Jones recovered 1252 points, a full five BEV points in only five trading sessions: very impressive. CNN took note, and reported exactly why on Wednesday the Dow Jones jumped over 600 points (a Dow Jones +2.50% day); the Federal Reserve intends to slow down increasing interest rates.
As per CNN, the Federal Reserve intends not to pop the bubble they inflated into the stock market any time soon, though CNN chose to describe the Fed’s action differently than I have. That’s good news, but somehow looking at the Dow Jones in daily bars below tells me the problems the stock market is currently facing may not be as simple to solve as the “market experts” at CNN would have us believe.
Look at the increase in market volatility for the Dow Jones since its October 3r last all-time high. For the past two months it’s been classical bear market action, with eight new Dow Jones 2% days in the past two months. During market advances we can go for years without seeing even one Dow Jones 2% day, and now we’ve seen eight of them in the past two months?
I’m out of the market prediction business. I haven’t a clue what’s to happen next with the Dow Jones. So I’m not predicting it, and I think it unlikely, but should