Expect DJIA to Trade Above 22,000 in the Coming Weeks, or Days
$DIA, $GLD, $SLV
Not unexpected, the Dow Jones made new all-time highs on the last 3 trading days last week. And finished Wednesday +66.02 at 21640.75 for another.
The number of BEV Zeros the Dow has made since the November election increases weekly.
Since the Donald Trump’s elections, there have been 170 NYSE trading sessions, of which 42 (25% or 1 in 4) have seen the Dow Jones close at a new all-time high.
Looking at all the BEV Zeros in the plot below, since last October, it’s been a Hot market.
However, it has also been a long time since the Dow Jones has seen a double-digit correction (Jan/Feb 2016), or when it found itself 5% or more from a last all-time high (last Summer).
This will not go on forever, and the market may be more than just a little shocked when it realizes that it takes a 1,082 point decline before the DJIA corrects just 5%.
Look at the table below.
It takes a 2,164 point decline before the Dow Jones sees a double digit correction. That will freak out everyone at CNBC. But what’s freaking me out is that the Dow Jones now finds itself at the door step of breaking above 22,000 in the day’s or weeks ahead.
The Dow Jones step sum chart below looks very positive.
Since March, its step sum has fallen behind the rising price plot, creating a bull box. Now it appears the step sum (market sentiment) is once again becoming as positive as the Dow Jones’ rising price plot. Just looking at what I see below, I expect the daily advances for the Dow Jones to begin overwhelming the daily declines in the weeks ahead of us (a rising step sum plot). That will close the bull box and should give the DJIA a nice little boost upward as this happens.
But after it does, what then?
It’s too early for us to think of that. Let’s see how far above 22,000 the Dow Jones can go before it Tops out.
It’s not just the DJIA that’s been making history since the November elections. The other major indexes are doing very good too. At the close of this week’s trading, twelve of the major market indexes I follow also closed at new all-time highs, and most of the rest are just a whisker from making one.
But the gains seen in the past two years are less than I’d expected.
Maybe we shouldn’t read too much into that as the only important point to make of this data is that these indexes are going up.
But the question is how much longer can an advance that began in March 2009 continue?
Maybe longer than any of us can imagine.
That said, I’m still curious about what happens come September-October. We’ll see another “debt crisis” in the US Treasury if Congress doesn’t raise the Treasury’s debt ceiling. That is usually a hard time for the stock market.
But if they do raise the debt ceiling, as they always do, how can having a national debt increase to over 20 trillion dollars not also be described as a debt crisis?
What is the government spending all this money on?
They don’t tell us, as they know we wouldn’t approve.
This is a bad situation, where ahead of us all is a dark alley where one day Mr Bear will greet everyone with a great big bear hug.
Let’s look at the Dow Jones Total Market Groups (DJTMG); first the new all-time highs. Keep in mind that currently there are 153 groups in the DJTMG, of which I only use 74 in the series below. I can’t help it. Since 1988, there have been many changes to this market series, each creating complications in my files and in my life. I finally said to heck with it. Just because the Dow Jones Inc. makes a change, doesn’t mean I have to follow. So, since 1992 it’s been 74 groups, and 74 groups it’s going to stay! It’s still good data.
Last week, the DJTMG groups I follow saw 15 new all-time highs, and as you can see in the table in the chart below, it saw 29 not all that long ago, in Barron’s June 5th issue. This series should peak, and then decline as a bear market approaches. Seeing a 29 just a few weeks ago, two and a half years after it last saw a 29 in December 2014, is a bit unusual.
Obviously the “policy makers” aren’t willing to allow their market bubble to deflate; not yet anyways.
I know I must make some people groan with my talking about the “policy makers” doing this and the “policy makers” doing that. But that’s the way it is.
Here’s the DJTMG’s 52Wk High & Low performance (76 groups / don’t even ask!). I bring to your attention #40: Retail Broadline. I keep seeing news about store closings for Sears, J.C. Penney’s, Best Buy and Walmart. I can drive around my community and see all the store closings and empty strip malls. Retail in July 2017 is in a horrible situation.
So, how can the DJTMG’s Retail group be only 1.52% from its 52Wk high, and up 21% from its 52Wk Low with all these store closings?
I expect it’s a “policy” thing.
Also, Amazon (NASDAQ:AMZN) has become the all-consuming beast in retail; a beast that’s doing to Walmart (NYSE:WMT), what Walmart did to everyone else in retail.
But then, Amazon’s Jeff Bezos is just someone who people enjoy doing nice things for.
First, Wall Street gives him $300 million to purchase the dying Washington Post, so it can continue maligning President Trump, then the CIA gives him a $600 million dollar contract for cloud services.
I’m not surprised the US Post Office is also giving Jeff’s retail business a $1.46 subsidy on every box it ships; wouldn’t you for Jeff?
This is the world we live in.
And I expect there are lots of economic statistics, published by the government for public consumption; statistics that are never questioned by the financial media that are as divorced from reality as the DJTMG’s Retail Broadline group below.
The same can be said for #41 (Auto Manufactures) and #42 (Broadcasting), and most likely many other groups in the table.
But as long as the stock market continues going up, all is right with the world – right?
Here are the DJTMG’s Top 20, or the number of groups above within 20% of their last all-time highs. The top 20 has been stuck in the mid to low 40’s since last July. It can’t go up, and won’t go down. Technically speaking, the Top 20 is stuck, and since 1992, that hasn’t happen very often.
Here is the frequency table where I derive the new all-time highs and the top 20 data for the DJTMG. There’s some churning between the groups in the BEV Zero to the -5% columns, but the top 20 column for the most part is stuck between 44 and 48 since February; really since last July.
What do I make of this?
Looking at the past twenty-five years in the chart above, it appears that our “bull market” is being managed by the usual suspects.
But if you’re in the market and making money, why should you care?
Well, you shouldn’t.
I’m a big bear on the stock market, but short term I’m pretty bullish. So if you’re making money, keep doing what you’re doing. Just remember, its times like this when it makes more sense to look for reasons to sell, than to find reasons to buy more of what you have.
Moving to gold and its step sum, it appears that contrary to what I said last week, both the price of gold and its step sum are in the early phases of reversing to the upside.
But the increase in the price of gold seen above is only from a one day advance, seen on Friday (today / table below). After a big decline that lasted a few trading weeks, seeing a one day bounce is not unexpected. So, it’s good seeing gold getting a nice bounce, but I’m still expecting lower gold prices in the days and maybe weeks to come.
I hope I am wrong.
No one would be happier than me seeing gold close over $1270 on Friday next week, today, Wednesday gold’s price was unchanged at $1242 oz
But markets work in cycles. I’m looking at gold’s step sum in the table below, and since June 9th (25 trading days ago) it’s remained around 242 the entire time as the price of gold has fallen $50. It’s a bear box.
Until the bulls, once again, are able to get more out of their advancing days than the bears in their declining days, this pattern isn’t going to change.
So, I’m still short term bearish on gold.
The story the Dow Jones’ step sum is telling us in the table above is completely different. Like gold, it’s step sum has been stuck between 439 to 443 for weeks, but the Dow Jones has been advancing. And now it appears its step sum will break above 443 next week.
If this happens, the Dow Jones most likely is entering into a period where it will see more advancing days than decliners IN AN ADVANCING MARKET.
If this happens, and it should, it won’t be hard for the Dow Jones to break above 22,000 in the weeks to come.
For reasons I don’t understand, the main-stream media (MSM) believes they’ve finally exposed President Trump’s secret, dastardly dealings with the Russkies via his son’s meeting with a Russian lawyer who promised to deliver dirt on Hillary Clinton last Summer.
That the Obama Department of Justice allowed this selfsame Russkie lawyer into the United States under “extraordinary circumstances” is a fact we need not to concern ourselves with.
“The Russian lawyer who penetrated Donald Trump’s inner circle was initially cleared into the United States by the Justice Department under “extraordinary circumstances” before she embarked on a lobbying campaign last year that ensnared the President’s eldest son, members of Congress, journalists and State Department officials, according to court and Justice Department documents and interviews.”
There are also photos of this Russkie with prominent Democrates at official party functions and anti-trump protests.
Entertaining as following this circus is, I believe the Deep State’s Russian gambit to discredit President Trump has played itself out.
The MSM needs something new.
Maybe the ticket is how Donald Trump Jr., a NRA member, murdered a member of an endangered species on a African Safari.
The new news narrative the MSM now needs to drum into public opinion, is that unless Congress impeaches the President ASAP, The Trump Family will drive this and other endangered species into extinction.
Well why not?
Over the past decades the MSM has done worse.
For instance on their reporting on the bombing of the Alfred P. Murrah Federal Building in Oklahoma City, Oklahoma in April 1995.
Below is the official version of the bombing by the History Channel.
Like the tale told by MSM, the History Channel’s version of this event is light on facts that have been known for a long time; facts that government investigators and the corporate media giants have chosen to ignore for over 20 years.
Here is another version of the bombing of the Murrah Building bombing by Prophecy in the News. Don’t worry, the focus in the link is on the Oklahoma bombing, not prophecy.
The video is only twenty eight minutes long, and well worth your time.
The question that this, and videos on other similar events, like 9/11, bring to mind is how is this possible?
Why would powerful people controlling the levers of government plan, and then execute horrific acts of terror on us, their own citizens?
And why would the main stream media do all it could to cover up the truth, willingly give lip-service to an official story line on events such as this that are so obviously erroneous?
If you’re like me, an adherent of the Judeo-Christian traditions seen in the Tanakh and Gospels, it’s an easy act of faith believing we live in an evil world.
In our worldview it’s expected government leaders would believe, and behave as if God’s Ten Commandments are for the rubes living in fly-over country. That citizens under their power, are merely a human resource to be manipulated and exploited, so it’s but a small jump believing such things are possible.
The most likely reason for the OK City bombing and 9/11 is that the “policy makers” wanted to in-act legislation that was greatly restricted the personal liberty of American citizens, and greatly broaden the police powers of Washington.
The only problem was the terrorist refused to cooperate with Washington’s elites.
Well, if the terrorist refuse to commit a horrific act of terror on Americans citizens, which would justify legislation to curtail civil rights and an expansion in the Federal government’s policy powers, then damn it the CIA is going to have to do it themselves, right?
You don’t believe that?
Well, maybe you’re right.
However, there are many things Federal agencies have done, or not done that are just odd. None of us has seen what is on the hard drive of Anthony Weiner’s laptop the NYPD confiscated last year. The NYPD wants to go public with it, but the FBI and the NY-T’s are keeping it off the record hoping this story goes away.
Because unlike you or me, I expect these insiders really do know what’s on it!
The fact the media spends so much time on President Trump’s fictional connections to alleged Russian hackers of the DNC computers, than on Seth Rich, the DNC’s information technology guy who almost assuredly did send their e-Mails to WikiLeaks before he was assassinated, confirms that CNN, and their colleagues in the media are indeed FAKE NEWS.
But why isn’t the FBI investigating this important aspect of the so called Russian hacking of the DNC’s servers?
There is something very wrong here.
Take the time to watch the video on the Oklahoma City bombing. There are big questions raised in it that are not being asked by government investigators or the MSM.
What kind of people, when given the power and opportunity would do something like that?
Political commentators on the internet with contacts in the NYPD and federal agencies, allege demon-worshiping pedophiles will be found on Weiner’s laptop, they very well may.
Funny how CNN is not the least curious to see that, or even bring to the public’s attention any questions of irregular public finance of our out-of-control government.
I hope you do not mind if I cover topics not directly market related.
I do it because they are all related.
The Federal Government that investigates acts of terror also “regulates” the financial and commodities markets. If you’re someone who wants to clean up the financial markets, you’re not going to be able to do that without cleaning up our out-of-control CIA and FBI, as well as giving the boot to members of Congress in the next election cycle who’ve allowed these renegade agencies to run amuck.
Here’s a link to a Sean Hannity video on the travel ban. It’s six minutes long and tells a compelling story.
That members of Congress and the MSM would want to open our borders to people from these war-torn areas of the Middle-East is bizarre.
These people, these members of Congress and the MSM are actually evil. But like I said before, that’s the world we live in.
Paul Ebeling, Editor