The Jaws Of Life: (The Most Hated Bull Market In History)
I would like to update the Dow Jones Industrial Average (DIA) or "INDU" we’ve been following which continues the upside move since the night of the US elections. Keep in mind some of these consolidation patterns began to form back in 2015 which had nothing to do with the US elections. It’s the billions upon billions of shares that were traded which produced this breakout move that is now being recognized for what it is.
Even at this stage of the breakout move, there will be many doubters who will never recognize what is actually taking place. It can be very difficult to think outside of the box when we are bombarded everyday on how bad things are and how bad things are going to get. There has to be the proverbial wall of worry in order to have a bull market. Once the bull market becomes mature then the wall of worry comes down, and everyone is invited to invest in the markets, which will be at the blow off phase like in 2000.
I would like to start by looking at a daily chart for the INDU which I first showed you back in early November of this year, which was consolidating in an eight point bullish falling wedge. Just before that bullish falling wedge the INDU built out another small consolidation pattern which was a bullish expanding falling wedge. Note the breakout from the bullish expanding falling wedge which failed to rally very strongly before the INDU began to correct, and formed the eight point bullish falling wedge. Whenever you see a nice tight consolidation pattern fail to reach its price objective it tells you one of two things. First, the original pattern may be morphing into a bigger pattern. The other possible scenario is a second small well defined consolidation pattern that forms on top of the lower one, which can produce a rising wedge which is the case for the INDU.
The last time I posted this chart I suggested most would see this rising wedge as a bearish rising wedge, and the INDU would collapse into a bear market. Through the years I’ve shown you countless rising wedges that broke to the upside, which always suggest the move is very strong. A consolidation pattern that is slopping up in the same direction of the uptrend instead of against the trend, would be your typical bull flag.