monday trading, page-32

EWI update below provides some clue as to the ultimate bottom in price. Interesting to note when I draw a trend line on a log chart of the XAO joining up the 1991, 1992 and 2003 lows, on Friday the low was only about 100 points above the trend line.

"On log scale, which is the scale of our original chart, there is no long-term trendline support until the 3500-4700 area on the DJIA. If one plots a monthly Dow on arithmetic scale, there may be trendline support crossing just above 6,000. This long-term line is drawn off the lows in 1984-1985, as well as the crash low in 1987. Whenever the market gets there, whether in this leg of the decline or after we get the inevitable countertrend rally, we’ll assess the efficacy of that trendline."