The rally out of the January/February intermediate-term cycle low has created tremendous doubt for the bears while at the same time it has also fueled tremendous hope for the bulls.
Robert Rhea explained in his writings on Dow Theory that once a Dow Theory primary trend change is established, “it is held to be valid and in force until it is reversed by an equally valid counter-trend signal.” Mr. Rhea also explained that price movement by one average that is unconfirmed by the other average and price movement between a previous secondary high and low point is, “meaningless and may be deceptive in its forecasting implications.”
Bottom line, the previously triggered red arrow stands until it is reversed and the price movement between the secondary high and lows points can be extremely uncomfortable with respect to the testing of the previously triggered trend change.
I understand how frustrating and confusing it is to be trapped between a previous secondary high and low point for two months amidst an ongoing rally of this magnitude. Unfortunately, we have no control over that and as of this writing, the previously bearish red arrow, while severely challenged, remains intact.
Wednesday of this week, the primary S&P500 indicator triggered a Green Arrow, because of todays big market decline, it took the arrow away.
Please login Friday of this week and check the primary S&P500 indicator.
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