Dow headed for all-time high, but then what?

Market Pulse: January 22


On the monthly chart notice how since 2008 the longest consecutive drop in the Dow was the five months between May 2011 and September 2011, opening in May at 12,787 and closing in September at 10,841. Look at October 2007 and the high hit at 14,267. Will we see this happen again, and if so then what? Well looking back at the weekly chart, take a good look at the Traders in Financial Futures. This past week Dealer/Intermediary came in net short -37,228 contracts, Asset Managers were net long 12,313 contracts and Leveraged Funds were net long 16,888. If we see increases in net shorts and net longs, there is a solid chance of 14,000 and beyond. If liquidation occurs, watch for a drop. If we see a break above 13,600 and the market stays above this area, there is good reason to believe 14,267 could be here soon.

Have a prosperous week. 




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