The next Big Red Line is here…this time on the Dow, not the S&P.  This is a multi-generational tipping point for the market.  And it still amazes me just how well the market hews to these lines.  There is nothing fundamental that I see that would be likely to take us down precipitously, and a service I follow just moved back to a buy signal, so it looks like the market will break through this line shortly.  However, it’s also possible that the market might stay sideways for some time to come as it works through this. For reference, below please find a monthly Dow chart, and then I zoom into the Daily.  If it breaks through the top big red line (and stays there), it’s likely that we’re going to have a multi-decade bull market.  The implications of this possibility are enormous, as it will “prove” (so long as you believe in this type of voodoo analysis)  the doomsayers completely wrong, and Keynesianism completely right.  I’ve long argued that the Fed is doing the right thing here…and if the politicians will finally settle down and fix our longer term structural problems, I think we’ll be just fine.  As always, I could be wrong.  Time will tell.

DJ-061813-Monthly DJ-061813-Daily

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