Well, things played out pretty much as I thought for today. The Dow did not in fact end up higher, and I was cautious about predicting a higher close, but it did make a (relatively) small range spinning top (nearly a doji) closing down just 37 points at 10,746. This clearly indicates some indecision in the market. So where next? Check out this chart:
Remind you of anything? Look at the current daily Dow:
The first chart is from the crazy times of October 2008. I've labeled four bars on it. Bar 1 is the hammer reversal on Friday, 10/10/08. Bar 2 is the subsequent huge runup on Monday, 10/13. Bar 3 is the doji day on Tuesday, 10/14. Now doesn't that look a lot like the action of the last three days? If history holds true, we can be looking at another significant down day tomorrow (bar 4). Even the daily volume shows a similar track. Even the days of the week are the same!
Now I know it's real popular to pooh pooh this sort of historical analysis, generally on the grounds that this is now and that was then (see my earlier post on "this time it's different"). Nonetheless, the similarities are striking. I guess we'll find out tomorrow.