When a Bear Rally Becomes Unstoppable

So much for the wall of worry! Bulls have improbably shrugged off steep downturns in the housing and auto sectors, rising interest rates, a costly tariff war with China, the pernicious rise of socialism on Capitol Hill, the economic implosion of China and Germany, a strong dollar that has sapped the earning of U.S. multinationals; and, most recently, evidence that retail sales nosedived during the Christmas shopping season. All of these things together do not diminish the unstoppable look of the Industrial Average (see inset) as it moves within pitching-wedge distance of new record highs. The Dow sits just inches from a 25,998 target we’ve used to stay comfortably with-the-flow, even as the trend has seemingly flouted sanity itself. At the target, the Indoos will have exceeded an important ‘external’ peak at 25,980, but also lie within easy distance of an even more important peak at 26,277 made three weeks earlier. Speaking as a hard-core permabear who has learned to tune out gut feelings so that the charts can speak for themselves, your editor will mention a 28,110 Hidden Pivot that would become a logical minimum objective once the Dow has conquered the obstacles noted above. That would put it nearly 9% above current levels and 30% above the 21,712 nadir recorded in the final days of 2018.