Lots of chatter across the blogosphere with regards to the breaking of the previous double bottom. Here is the chart. Also, according to technical analysis rules and regulations for a double or triple bottom to be valid, it must trade below the previous level.

Why?

Haven’t the faintest idea, but it is a rule nonetheless.

Trouble is, Dow Theory requires a major move, or change in trend to be confirmed by the Transports, and it most definitely at this point in time lacks that corroboration.

The reason of course is that the economy has gone bi-polar, possibly even schizophrenic. There are sectors, anything energy, commodity based [agriculture] are doing well, almost too well [bubble like] and anything financial are perceived to be one step from bankruptcy.

Also, there is yet to be any confirmation from the Tech heavy NASDAQ and broad based S&P500 Thus the plunge in the Dow30 today, could very well reverse tomorrow, although I suspect, more likely next week.