My email to Richard Russell and my Dow observations

http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]wallyiay[pb40!f][vc60][iut!Ua12,26,9!Ub14]&pref=G

Richard,

Breaking the prior peak at first might seem as a decent accomplishment, and is as far as the retracement goes......but when looking back as we can, in the context of the greater Bear Market (if we're still in one even though PTI made an alltime high) this feat is NOT that unusual, and has in the past SET UP a greater reversal.

Please note that after making the bull mkt high in 2000, the DOW managed to defeat the 40 WEEK moving average twice in 2000, once in 2001 and once in 2002 BEFORE making SIGNIFICANT DECLINES! (also these spike bettered the highs of the previous declines)

I also observe the "LOOK" of the MACD and RSI are VERY similar when this occurred. And UNLIKE the previous BULL MKT when the 40 WEEK (200 SMA) was RISING, the 40 WEEK during this Bear Market and subsequent corrections (rallies) has been in a declining to flattening projection.

ALSO, only ONE other time since 1995 has the 40 WEEK flattened out, and that was in 2000 when the DOW reached it's all time highs.....to date.

SO far, the DECLINING trendline formed from the TOPS in 2000, 2002 and 2004 is still in play, it crosses not far from where we now lay.

Your point in NOT fighting the tape (even with fundamentals as we know them) is VERY well taken and understood. My exercise was to try and put into context to what has occurred in the past to gain some insight as to what are some of the potentials. Especially since the BULLISH DIN has grown so deafening, sending many indicators not only into overbought readings on the 5 day but VERY overbought, and some on the 5 week readings.

Appreciate your insights and look forward to exploring the future with you.

Duratek