For well over a month the DJIA has been defying gravity. We had another peak yesterday at the 28,400 price level which is also the right shoulder of an H&S pattern. That’s just one indicator that the markets are approaching bull market resistance. Technically, this 4th wave rally can handle more, as diagonal 4th waves can dip into the previous wave 2. Right now the DJIA is in the midst of a 3 wave move, but two more can develop, pushing to another record high! Gold has also soared during the same time period and this morning gold was close to $1310.
The Gold/DJIA ratio has not changed much as the DJIA is still very expensive at 18.76:1. That is better than the 21:1 ratio we did get and a far cry from the cheap readings of 7.19:1. Maybe if we are lucky more government reports will come out this Friday, Feb,1, that will include some COT reports. Since Friday would be a new month other economic reports will also come out. All this could produce some very violent moves with the cold winter blast grounding flights. Grounding planes will affect their earnings as well, which could take some time before they report.
Once it gets colder in Chicago than the Arctic, then you know it’s fricken cold out.