DJ30: 6th Straight Up Week!

The Dow made its 6th straight up week last week, which is definitely something to celebrate about for the ignorant. For the professional and veteran, we all know that each consecutive up week brings us closer to that inevitable pullback... what the Elliot wave guys call Wave B or what the Dow theorist call the Secondary Movement and what the Astro-finance guys deem coinciding with Venus Direct. Phew... what does all that jazz mean? Simply that this week is going to be a very dangerous week. Yes, the Dow's overbought short term and intermediate term and running into a strong resistance band. All these tells me that the pullback that I wrongly estimated would happen last week might just happen this week.

We all like the market to go straight up but it is just out of the realm of humanity to do that. Why is that so?

Fear + Greed.

Greed causes traders to drive prices up as they follow the herd but as prices go higher and higher, the marginal utility of profit making falls and the fear of losing those profit takes over. It will come to a tipping point where making more money is less satisfying than the fear of losing those gains so far and then a profit taking occurs, taking the market down. This is the reason behind the zig zag movement of the market. So, there are no conspiracies for your money, our emotions and nature as human conspired against ourselves.