The Dow rallies to a new high – what now?

John Burford is reminded that there's no such thing as a sure thing in the markets as the Dow Jones rallies to a new high. But the charts indicate a reversal could still be on the cards.

Yesterday I laid out a reasonably strong case for last Thursday's high at 12,920 to be the top of the incredible Dow rally off the October low at 10,400.

I showed a convincing minor five-wave Elliott wave pattern off Thursday's high, an extreme in investor bullishness (which normally coincides with tops), and a large-scale rising wedge, which normally resolves downwards.

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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.