I wanted to point out a couple of “big picture” charts, as we all wonder just how far this dreadful countertrend rally is going to push. The first is the Dow Jones Composite, which has become, for me, the most important index to watch. There is an interesting gap that took place precisely at the start of the year. Closing the gap would only take another 1.5% push higher in the market. I’ve tinted it below.
The other more interesting thing is that I’ve drawn out a rather well-formed diamond pattern in – appropriately enough – the diamonds (that is, the ETF for the Dow 30. Duh.). Diamonds are a favorite pattern of mine, so let’s see how this plays out; a break beneath the pattern, of course, means I can return to my excited, loud-mouthed self.
