From the high of 14,166 the DOW Jones Industrial Average plunged almost 2,500 points to 11,750. I was feeling pretty smug that I was right as I watched it drop week after week to new lows.

As a professional trader, former exchange member and floor trader I am always looking to see where I can be wrong. The fundamentals are and continue to be bearish. The “experts” bring a boatload of bad news to radio and TV every day. They are as confused as most investors.

Mr. Market is saying otherwise.

What every trader watches is reaction to news. For more than a month the market has reacted negatively momentarily to bearish news, shrugged it off and closed higher. This is its way of saying the news is not correct. The market knows more than the news. This has been a scary correction.

Besides the thousands of stocks listed on the New York Stock Exchange there are millions of people who buy and sell these equities. Obviously there is a huge amount of smart money buying. Of course, these investors are not going to tell the “little guy” what they know. No, they are buying what he has to sell at what they believe to be cheap prices. Those are the prices listed now, today, this week, this month.

Later, when Joe Sixpack suddenly realizes the market is doing well and he should buy those same smart money folks will be selling him issues they bought at today’s prices. That’s the name of the game: Buy low, sell high. For those who do not understand the rules it is: buy high and sell low.

If you don’t know how to play this the game you should not be sitting at the table with the pros. Let me assure every investor (gambler) that 99% of brokers do not know how to play. Brokers are taught Wall Street rules. Those rules are designed to take investor money and not protect his portfolio.

Mr. Market is now clearly saying to all who hear its voice, “I am going back up”. Forget the bad news. The recent 1,100 point rally off the recent March low is only the beginning of this move.

The bad news may continue for a while, but the DOW will not go down. It probably won’t be until the DOW makes new highs that the small investors will begin buying. The higher it goes the more they will sucked in to buy at those new higher prices. At that time the talking heads will be telling a different story.

Technical analysis will show when the new top is forming. Few brokers are expert enough in this type of analysis to comprehend.

The bear is back in his cave and the bull is running free on the range.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2008 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"