Reply #18: If the market follows this mornings futures, It's below Russells floor.

[Dr.Phool]

Dow Theory, which stems from observations made by Wall Street Journal founder Charles Dow during the late 1800s, holds that moves by the transportation average must be “confirmed” by the industrial measure, and vice versa, to be sustained.

The Dow Jones Industrial Average fell 6.9 percent during the four days that ended May 7, sinking to 10,380.43, the lowest level since Feb. 26. The transportation gauge closed at 4,298.12, down 11 percent in four days. Downgrades of Greece, Spain and Portugal helped trigger the decline as the prospect of a sovereign default in Europe undermined investor confidence.

“If the two averages violate their May 7 lows, I see a major crash as the outcome,” Russell wrote. With the exception of gold companies, Russell advised readers to “get out of stocks now, and I don’t give a damn whether you have paper losses or paper profits.”
-----------------------------------------------------------------

Dow was at 10,357 at 7:10am. I didn't check the transports, but the were around 100pts above the 4298 at the close yesterday.

Not, that I put much faith in Dow Theory. We all remember that crank-yanker who was always babbling about non-confirmation confirmations in the opening SMW post a long time ago. But, it looks like a herd mentality among big-money funds, is getting ready to stampede. They're starting to realize that there just ain't any "there" there. Propaganda and double-think will only last so long.