Meep Meep!
Recently I wrote about the DJIA and the In Between - the gap between 26,713 and 26,963. In fact, the day I posted the Dow Jones Industrial Average closed the day above 27,000.
Failure to Launch?
That post was followed up by another which concluded with:
"As markets open we wait and watch to see which door the DJIA will go through. Will it open the door that takes the market through the interim high of 27,110.98 past 27,213 to accelerate higher, perhaps to 30,000 or above as some anticipate?
Or does the DJIA jiggle the door knob only to find that it is locked and the only door that opens leads to the basement back down to 18,213.65 or below?
China, Virus or Cycles?
Given the choice between blaming China / COVID-19 or Cycles, I'd choose cycles 100% of the time to pin the blame on the current movement of the DJIA. If you're interested in learning more about my view about the Pieces of the Stock Market Programming then you should check out this post.
Which Way?
While markets love making fools out of those who dare to prognosticate their movements, the previous interim high for the DJIA at 27,110.98 is the probable interim high for this market near-to-medium-term. How long are we talking about? A few days to a few months.
2020 Elections
Back in December, before I disappeared myself from Twitter I wrote:
Viewed as simulation / narrative a 2020 market decline would make for a far more interesting political contest.
Reagan contended with a tough market and economy before things turned for the better.
Linear motion and improvement is not the norm.While many on Twitter in December of 2019 had expectations that a great stock market and economy would sweep President Trump into a re-election in a landslide, I thought the more interesting narrative of a correction and close election would emerge. It did in spades.
Down Before Up?
There may still be some who expect a V-Shaped Recovery and Dow 30,000 right around the corner. I'm not one of them. My expectation is that with continuing economic strain caused by renewed COVID-19 hot spots, current and future lock-downs, escalating tensions with China, and the 2020 election not in the bag for President Trump the highest probability move, in my opinion, is lower for the markets - especially the DJIA which is tied to the more traditional brick and mortar economy.
Coyote Ugly
Maybe the wily folks predicting Dow 30,000 are right, but I think their dreams of a V-Shape Recovery powered by Acme products is about to meet the trash bin.
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