It was just my luck to have hung out a headline predicting a 600-point rally on a day when the Industrial Average got sacked for 231 points. However, you can see for yourself that the mini-avalanche has done little real damage thus far to the preternatural upwardliness of the weekly chart (inset). By my runes, it would take an uncorrected selloff exceeding 14719 to wipe the stupid smile off Wall Street’s face. An ‘impulse leg’ with that kind of power would allow permabears, finally, to breathe a sigh of relief over the death of a five-year bull market that even on its best days was never more than a brazen hoax. (And by the way, DaBoyz will be splitting a bonus pool of $26 billion for all the hard work they did in 2013.)
For the present, and irrespective of yesterday’s loss, my ambitious rally target (17622) for this vehicle will stand, at least in theory and until such time as 14719 is exceeded to the downside. Meanwhile, as a practical matter we should trade the Indoos with a bearish bias, since it seems extremely likely to go at least somewhat lower before it can go higher.