I’ve been reviewing the history of the markets, as a refresher, to properly evaluate the current market, and I’ve noticed some interesting historical relationships.
The first chart I’m posting is the DOWbullmkt…: our current chart in the DOW. The second chart is DOWpast: it displays a similar pattern, as our current Dow, just prior to the Dow doubling in the course of the following two years: 1986-87. The third chart displays the greatest bull market of all time: 1982 – 2000. Notice the wedges that appeared just before the market exploded upward, just like the wedge that unfolded in 1984-85.
Wedges/triangles are considered, in OEW terms: as periods of consolidation that allow the time for the fundamentals to simply catch up to the market. Of course there are diagonal triangles which can terminate an uptrend such as early 1984. But it didn’t end the bull market, only the first phase of it.
I feel we’ll just have to be patient and ride through this ongoing consolidation period, and in the end: it will pay off handsomely. Happy New Year!