The Dow hits a new high – but will it last?

Many pundits have declared the start of a major bull-market in the Dow. Are they right? John C Burford checks the charts.

In my 9 May post, I asked the question: Are stocks in a bubble? Of course, this is a 'how long is a piece of string' question. It is more a meta-physical argument than a proper question for traders who live or die by the trading decisions they make. For traders, the correct question is this: "Is the stock-market rally about to terminate or continue?"

Recall I had the 16,600 level on the Dow as my critical level - that was my line in the sand. On Tuesday, the market girded its loins and closed above it for the very first time in history. So, was this the start of a massive push higher on the back of this broken resistance?

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.