During the Hidden Pivot Webinar, I present a slide entitled ‘My Epiphany’. Graphically, it tells the story of why, when my outlook is uncertain, I tune out everything but the mechanically objective information on my charts. Notice in the inset within the large chart that a rally begun in March 2003 (green arrow) culminated a year later with a thrust that slightly exceeded a key ‘external’ peak (at 10673) recorded a year earlier. This was undeniably bullish, and I could not ignore it even though the opinions I was expressing in print at the time were as bearish as could be. The chart said not only that the Dow was not about to collapse, but that a 3000-point rally to just above 14000 lay just ahead.
Cut to October 2015. We see in the large chart a rally currently in its third month that is almost identical, albeit in miniature, to the one in 2003. The implication is that, bearish though I may be, I would have to embrace the bullish case, at least for the time being, if July’s 18137 peak is exceeded. So far, the powerful short-squeeze from August 24’s low has gone no higher than 17978 — 334 points shy of the bullish threshold. Will it get there? Only time will tell. My short-term outlook happens to be bearish at the moment, but I’ve set an alert to make certain that I’m not asleep at the wheel if and when 18312 is topped. Stay tuned if you want to keep on top of any further developments.