DOW coiling under Big Bear resistance line

Please indulge me while I anthropomorphize the stock market.

A line on a chart is valuable only to the degree that price "respects" its authority. Price shows respect the same way a small time street hustler shows respect to a Mafia lieutenant - by doing what it's told and staying out of the line's face.

That means price runs away from the line when it gets too close, or it gaps over the line when it wants to get to the other side. In either case, price wants to quickly put distance between itself and the line, lest it receive a beat down. That's respect, and it makes for an orderly crime syndicate as well as orderly technical analysis.


On the other hand, price shows disrespect when it lingers all up in the line's business, jabbing a finger into the line's chest, saying, "Oh yeah? What are you gonna do about it?"

In technical analysis, some people call this "coiling." I call it disrespect, and it's often a sign that the established order is about to be challenged. And just like in a gangster flick, that usually means the shedding of blood... but whose?

Back to the Dow. On the charts below, you can clearly see that the Dow is showing nothing but disrespect for the orange Big Bear trend line. Like a crappy British pop band, it gets knocked down, but it gets up again and again and again. Ha ha, now that song is stuck your head.

Don Big Bear needs to address this situation immediately, and to do so with his characteristic ultra-violence, if he wants to keep his grip.

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