Updated Charts (again)

So it's been about a week (in trading days) and the Dow has finally broken lower out of that sideways trading that was going on.  Honestly, I would have thought that there would be some huge selling off after the Federal Reserve announcement of basically nothing the other day.  Instead, things have been slowly working their way down.

If I break out the handy eraser in MS Paint, we can get rid of that quick drop and rebound from the opening of liquidity to European banks through the Federal Reserve Swaps from a couple weeks ago, and here you can see what's happening.

As you can see, there's definitely a pattern here of a rounded top.

Implication

A Rounded Top is considered a bearish signal, indicating a possible reversal of the current uptrend to a new downtrend.

top

Description

A Rounded Top is dome-shaped, and is sometimes referred to as an inverted bowl or a saucer top. The pattern is confirmed when the price breaks down below its moving average.

http://www.trending123.com/patterns/rounded_top.html

So pretty much, back to where we were a couple weeks ago almost where the bottom dropped out and it looked like a very dire situation developing.  Well, this is where again, the government will have to step in and provide more "liquidity" for the new "double dip recession" to not continue developing.

Ok, shifting gears...

Eventually I will have a specific post on the developing Currency War that's going on.  But when you hear talk of the government being upset with China (or anyone else) for "currency manipulation" and tariffs or sanctions or anything else along those lines to "boost" the economy, that is a new battle in the Currency War.  Currency Wars aren't good for anybody.  It's just more government intervention directed to get extremely short term gains on some chart or statistic.  In the long run, these are bad and hurt the economy.

http://news.yahoo.com/china-gets-revenge-obama-tariff-u-autos-213747820.html

Here's an article discussing China's actions or (response) to a previous battle the U.S. initiated.  Obviously this is going to be very bad for the automakers and the companies that are selling these vehicles into China.  They will immediately have a 20% price increase.  That will change people's minds about purchasing these specific vehicles, and buy something domestic instead.  Not too dissimilar to what has taken place here in the past 3 years.

So there's two things to think about.  More later.