I’ve dealt with a lot of strange and difficult markets over the last half/century, but this one may deserve a prize. Today, instead of rallying above its May 1st peak, the D-J Industrial Average sold off an hour before the close. The sell-off left the Dow around 70 points below its May 1st peak.
I felt that the negative action was almost as if the Dow had already closed above 13,279.32, unconfirmed by the Transports– and down it went. The Dow was jumping the gun on a fantasy non-confirmation.
My only conclusion is that something evil and bearish is bubbling in the guts of this market — and it’s giving the market a severe case of indigestion. Of course, I could say that with a yield below 3%, the Dow is classically overvalued, and any rally would just render the Dow more overvalued.
That doesn’t sound good. If this means an epic sell-off is imminent, then Russell’s call would be right in line with another bearish warning we got earlier this morning from Nomura’s Bob Janjuah.
As usual, Russell’s full commentary is very colorerd with other anecdotes.
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