They say a blizzard starts with a single snowflake that fits on the end of your finger.

Fundamentals work. And having been influenced by Sir John Templeton for over 25 years, that’s a message I can’t ignore. Of late, the fundamentals sure seem to be sending a concerning message. Here is a chart I made in early July when the Dow was testing the 2-year falling channel support at (2) in the chart below.


On the other hand, did the first positive TA snowflake start falling over a month ago? High yields first started sending a positive message and the Dow held at falling channel support, the technicals have been sharing that something different could be in the making.

Here is a series of positive snowflakes since the date of the twins chart:

The Technical Analysis Bottom Line

Positives that started over a month ago: High yields expressing strength, Nasdaq 100 held at its neckline, Copper and Base metals breaking resistance, numerous indexes look to have created “inverse head & shoulders” patterns (500, Russell, NDX and Banks).

NOW the key TA is the NECKLINE of the 500, Russell and NDX (see Triplets at Play). The neckline has to be taken out for these positives to continue.

I’ll end this retrospective with a look at the Dow after today’s close — 800 points higher than it was in the chart above.

falling channel

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past