Selling pressure warns of correction
By Colin Twiggs
March 19th, 2012 7:00 a.m. ET (10:00 p.m. AET)
Medium-term selling pressure, signaled by bearish divergence on 21-day Twiggs Money Flow, continues to warn of a correction in US and Asia-Pacific markets. The Dow Jones TSM (formerly "Wilshire") Asia-Pacific Index displays a bearish divergence since mid-February. Reversal below 1280 would confirm a correction.
Dow Jones Industrial Average shows a similar bearish divergence, though the latest down-turn was exaggerated by triple-witching hour [TW] on Friday. Reversal below 12750 would confirm a correction.
Let me introduce Mauldin's Rule of Thumb Concerning Unintended Consequences:
For every government law hurriedly passed in response to a current or recent crisis, there
will be two or more unintended consequences, which will have equal or greater negative effects
then the problem it was designed to fix. A corollary is that unelected institutions are at least as
bad and possibly worse than elected governments. A further corollary is that laws passed to
appease a particular group, whether voters or a particular industry, will have at least three
unintended consequences, most of which will eventually have the opposite effect than the
intended outcomes and transfer costs to innocent bystanders.
~ John Mauldin