Can we still make it to DJIA 20,000 by Christmas 2015?
Anything is possible! We have seen how far and how fast the indices can move in a single day. Therefore, a move of some 3,500 points in the next four months is possible… But is it probable?
Now you are thinking how I can even flirt with the idea of DJIA 20,000 when we are looking at a possible market crash scenario.
I called the very big drop when DJIA closed last Thursday at 16,990. It did not matter much that it was only 10 points under 17,000… the importance lay in breaking the 17,000, which, as I have said here often, is the decider whether we are in a bull trend or bear trend or facing a crash scenario.
At present I am leaning more towards a crash scenario, although we have had some significant come backs. This is simply based on 17k DJIA being broken (it is a very important level, without going into the details, and indeed proved to be very important as the two day major falls in S&P and FTSE immediately followed the break of that level).
So, back to my original question: What do we do from here?
This is a market where, even if you get it right, you could get wiped out by the severity of the fluctuations. Therefore I go back to what I know – I know the 17,000 DJIA is the decider.
If we go above 17,000 the chances increase significantly that the bull market will continue and we could head towards DJIA 20,000. Under that level, we are flirting with the idea of a crash scenario.
At the moment I am with the crash unless we go above DJIA 17,000.
Caution is king!
All in my humble opinion and no investment advice intended.
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