Not ‘If’ But ‘When’

During the last few minutes of trading on Friday, the DJI moved fractionally above the 11,000 mark for a brief moment, not long enough for one to count to ten. At the close, the DJI ended at less than 3 points shy of 11,000. I believe this is fortunate for the bulls and unfortunate for the bears. If the DJI have closed fractionally above the 11,000 level, this will only give the bears courage to pound on the market come next Monday since the DJI would have breached the 11,000 without momentum and without a catalyst. Whenever a technical or psychological level has been breached, it must have a catalyst accompanied with momentum in order to be relevant or it is just a head fake.

Will the DJI move above 11,000? The answer is a resounding ‘yes.' It is not a matter of ‘if’ but a matter of ‘when’ the DJI will cross the 11,000 mark. By looking at the DJT’s performance, it clearly indicates the DJI will move above the 11,000 level. Today the DJT closed at another closing high, and this time the DJI also closed with a new closing high. Based on the Dow Theory, the DJI will not terminate its advance until a non-confirming closing high has been made. Therefore, with less than 3 points away from the 11,000, it is inevitable the DJI will crossover the 11,000 before this rally end.

I will be watching the market closely next week as first quarter earnings reports start to flow. The market will likely attach itself with the positive earnings reports and use them as a catalyst to propel the DJI above 11,000. How high will it go? We won’t know until it gets there, but keep watching. The market will give us the signs just as it is giving us signs that the DJI will see higher high.

Check out the charts...

DJI:



DJT:



SPX: