We have been mentioning for weeks that stocks may be setting up for another push to new highs. That move seems to be underway. This opens the door for Dow 20000 and Nasdaq 5000. If that sounds boring, that’s just the way it is. Good investing is boring… most of the time.
I just don’t want to be one of the countless pundits and bloggers that keep warning for the next crash or crisis over and over until they are inevitably right eventually. That’s how some folks have also “predicted” ten out of the last two recessions, as the joke goes.
Let’s have our customary look at the S&P 500 chart (click image to enlarge it):
We have another week of lunar green period to go. And all my technical indicators are pointing up. That suggests more upside to come. The S&P 500 could sputter near 2120, and then it goes to the next resistance level near 2200.
Could it be a false breakout? That’s still possible, but the odds are dwindling quickly. Most likely this marks the end of a sideways pattern that started in November.
What keeps this market going higher and higher? Well, one basic concept in investing is that you don’t sell an asset until you can replace it with something better. People who sell their stocks start looking around and find themselves in the middle of a zero interest rates desert where nothing grows. Here and there they notice a little oasis formed by dividend paying stocks.
Be well,
Danny
LunaticTrader 