The Indoos dove more than 300 points last week after topping at the precise intersection of a well advertised trendline and an important Hidden Pivot target. The two obstacles together represented the most formidable technical challenge bulls have faced in more than a year. Ordinarily we might expect a correction lasting at least four to six weeks. But these days, four to six days of weakness seems more likely, given the relentless enthusiasm of buyers and the very narrow list of stocks on which they have trained their buying power. So where to next? I’d suggest using a 30299 target for now. It comes from the weekly chart and is the secondary (p2) Hidden Pivot of a rally pattern begun from A=15,503 in February of 2016. _______ UPDATE (Jan 7, 10:10 p.m.): Before tonight’s selloff I’d assumed last Thursday’s slight penetration of a very strong trendline was bullish. I still think so, albeit with somewhat reduced confidence. The trendline itself is as clear and compelling as they come, and that’s why I think the pop above it holds bullish implications. Here’s a chart that shows it. _______ UPDATE (Jan 8, 9:34 p.m.): The Indoos popped above the trendline again before settling about 80 points below it. If they can close for two straight days above the line, look for more upside to at least 29,299. That Hidden Pivot comes from the following coordinates on the daily chart: A=27,801 (12/11); B=28701 (12/27). Please note as well that p2=29,059 could offer resistance that would potentially be tradable. ______ UPDATE (Jan 13, 5:40 p.m.): Remember that scene in Mars Attacks! where the U.S. military, having failed to stop the aliens with missiles and cannons, explodes a nuclear device in outer space near their spaceship? An alien sucks the mushroom cloud into his lungs like some stoner inhaling vaporized marijuana from a bong, and then he lights up with drug-addled delight. Well, the INDUs have performed a similar feat, turning what had appeared to be an all-but-impenetrable trendline into support. Here’s the graph, and there’s no point in wondering any longer whether the 29,299 target will be reached.
$DJIA – Dow Industrial Average (Last:28,907)
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