http://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=1&mn=0&dy=0&id=p20970412253&a=574130367

Absent minded?  Who’s absent minded?  Well we did forget the final part of our last letter — our first mistake this year.  So here is what we forgot to say:

The market is looking so bullish that we decided to run a Rule of Seven study on it (http://www.edwards-magee.com/ggu/ruleofseven.pdf).The result is above.  This study is subject to criticism in that a perfect chart for interpretation doesn’t exist.  Normally we would want a consolidation formation from which the measuring wave breaks out.  Pauses and consolidation formations have been few and far between in this historic bull market.  Nevertheless we found a couple of candidates — those areas between the vertical lines.  The first of these  generates targets of 24676, 25652, 27621 and 33512.  The second, taken at a higher point of the trend, generates targets of 28022, 29109, 31303 and 37866.

These are incendary targets and the market is steaming like a volcano about to blow.

Get an umbrella.