It’s important to note that, historically, the first five days of market action are indicative of the direction we’ll take for the next 12 months. And already things have been somewhat positive, with the Dow and Nasdaq at all-time highs.
Stocks were down over 300 points at worst early on Friday morning, largely erasing Thursday’s strong gains. More important, the markets are backing off of my key resistance point just over 28,000 on the Dow. Breaking above Thursday’s high of 28,873 will be bullish near-term, but breaking below 26,300 will be more bearish.
Monthly Watch
We’ll have to see how things continue to progress. And remember, one thing that’s a better indicator than the first five days? The first full month.
Of course 2020 is expected to be an anomaly, as I’ve been writing about for quite some time, so it’ll be tough to apply the conventional wisdom of market trends to what happens over the next few weeks.
Remember, we’re still deep into this megaphone pattern, and a downturn could also be coming that would scare people before the 2020 peak. That, along with the tumultuous political landscape at the moment – to say nothing of what happened in Baghdad overnight – will only further muddy the waters. And that’s to say nothing of the pressures Trump will put on the Fed in order to keep the economy humming as he moves toward his re-election.
To put it lightly, we’re in for quite a wild one.