A few words concerning my unwontedly rosy forecast for the Dow Industrials. My prediction that the blue chip average eventually will achieve 13045 was not inspired by any particular thought, nor by events that may have occurred or which could conceivably occur, in the real world. It is in fact a coldly mechanical objective derived from the long-term charts, and in its coldly mechanical way, it implicitly acknowledges the fact that stocks can do just about anything without heed to events in what we should like to call the 'real' world. They can tumble into a relentless bear market just when the economy seems to be going gangbusters; they can do essentially nothing for seven years, no matter what the news; or they can soar, as they are doing now, even with a spectacular and potentially depressionary real estate bust glowering on the horizon. But merely because my long-term charts point to an impending 900-point rally in a handful of Dow stocks does not necessarily mean we should become hand-over-fist buyers at these levels. In fact, we are only ultra-cautious buyers on pullbacks, even as we treat every Hidden Pivot rally target, no matter how minor, as a potential very long-term top -- and a shorting opportunity. Russell's Observation Headline highs aside, is it really a bull market? As Richard Russell once taught us, the fact that the stock market is making new all-time highs does not necessarily qualify it as a true bull. In his latest newsletter, Bob Prechter recalls Russell's prescience on this point 33 years ago: 'I can recall reading Richard Russell's Dow Theory Letters in 1973, and he correctly said that the new highs in the Dow and S&P were part of a bear market. To many people this claim did not make sense, but he
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