I think this part of the market is in for some more records. Again I’m looking at a quarterly view but when making long-term predictions you need a long term past to base from. I see much the same thing I saw with the SPX with a couple of major additions.
Back in 99-00 there was a discernable blow-off top (arrows) and one of my favorite “tells” the “steeples” started appearing. A "steeple" to me means that price is going up but then pulling back leaving a long neck on the candle.
I call the resulting view a "steeple" because in the olden days when the traveler was approaching the ville in the distance the first thing he could see was the steeples on the various churches and cathedrals. That was his first signal that his weary trip was nearly done. When I see steeples forming in any stock I’m involved in I start looking confirmation, and after getting it, I get.
To me that “Roman candle” (you never knew what that was called did you) in the first quarter of 00 was a confirmation signaling end of trip.
Once again note that the distance between the close and the EMA 21 at “a” is about twice as much as at “b”. That suggests to me that there is still room for this market to run. Based on that idea I think we see the 15000 Dow Industrials this year.
And here is the 50-year view with the moments that the EMA 4 crossed under the EMA 21 circled. Once again that doesn’t happen very often. Then after it crosses back over again it seems to want to stay there. I think that there are reasons for this – but they will have to wait for another post because they are even more cockamamie than predicting a 15000 Dow.
As always folks – just a guess with about as much chance of being correct as all the other mother-guessers out there.