Yesterday, the Dow Jones Industrial Average (INDU) effectively reached my target of January 3. The preferred and alternate intermediate counts are still both bullish — though there’s one small bear hope still remaining (an ending diagonal, not shown) since the key long-term pivots haven’t been crossed yet. Bears would basically have to turn the market more or less immediately in order to pull out a stunning upset, but currently that appears to be low probability.
As it turns out, my observation on October 8 of a three-wave rally into the 2012 high, and subsequent expectation that the market would make new highs after the correction, proved to be accurate.
The long-term chart of INDU notes the next resistance levels. If bulls can keep pushing a bit farther, they give themselves a shot to run toward the black dashed median line, and potentially as high as the top of the black channel.
Still no material change in the S&P 500 (SPX), though I presently have some slight concern about the rally from the 1470’s being part of an extended fifth wave (black alt: 3 and 4), and INDU has now been added to the markets which have reached my targets, so I continue to feel it’s prudent to protect profits. Beyond that, the market is starting to lull all of us into a bullish stupor — and when complacency sets in, the market becomes ripe for unexpected corrections. The blue trend lines would be the first warnings. (continued, next page)