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.