04 December 2008

The Trend Is Your Friend

(Not so) ancient Wall Street proverb: The trend is your friend.

Check out the following charts of the S&P 500, the Dow, and the Russell 2000. As per usual, click on the image to make it large and legible.

I added the current trend line in Grimace purple. Notice that every time the bulls have tried to rally, the downward trend prevails.

S&P 500:

Dow 30:

Russell 2K:

Much like fashions, trends don't last in perpetuity. However, the current downward trend doesn't seem to be going away anytime soon. This bear market ain't a Members Only jacket or a pair of Crocs.

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