... Richard Russell, had this to say in his latest commentary: “Lowry's is one of the technical studies that I depend on in my appraisals of the stock market. Turning then to Lowry's figures, what we see here is critically important. In early August, the Buying Power Index (demand) broke below the Selling Pressure Index (supply).”
Richard Russell continues:
“Even more important, Buying Power since last February has been in a sideways movement -- but in late-July Buying Power suddenly broke down and embarked on a long down-sloping trend. At the same time, Selling Pressure was gliding down gently but it suddenly turned up in late July. What we see now is the two indices spreading apart which is extremely bearish -- Selling pressure is steadily increasing while Buying Power is dropping like a stone.
This clear and steady deterioration in the market's internals is being masked or hidden by a parade of good news regarding the US economy and by a persistent and deceptive rise in the Dow. At some point in the near future, the weakening internals of the market will cause the Dow to buckle and the bear market will burst into view again.
The aftermath of debt bubbles, when they burst, is measured, not in years, but in decades. I've said before that my signal for the end of this extended top will be that time when the Dow breaks below 10,000. Once, having violated 10,000, I expect consumers to turn dead-bearish, and I expect the currently optimistic analysts to become pessimistic.
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