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Black Swan event could come as early as Tuesday, 2-22-11

|Includes: SDS, ProShares Short S&P 500 ETF (SH)

 

As I dig deep, beneath the euphoria in Egypt and the Bernanke-Geithner over extended 2-year stock and bond market rally, notice that the 21 day moving average of the DJIA Up-Volume minus DJIA Down-Volume may soon break to the downside. I bring this to your attention because a similar break occurred two days before the May 6th Flash Crash, on May 4, 2010. The DJIA 21-day moving average was also breached on the same day of the 4th, but the same scenario is now building as the DJIA 8-day moving average versus the 21-day moving average spread is beginning to narrow as of Wednesday, February 16th.

My original projection was March 3
rd, however, momentum is gathering steam towards a potential earlier date. Thinking out loud, surprises often take place after a long holiday weekend (Presidents' Day in this case), and could produce my proposed "Flash Crash" or “Black Swan” unexpected event.

I do not write very often, but when I do see something of importance, I like to put the thought out for consideration before the potential event takes place, if it does at all.

Douglas Gale

MktMetrics.com