The Dow Jones is the most watched index, it is also the most manipulated. It is now threatening to make a new high as it is only a hundred points away from the may highs of last year. Much of this thanks to the Fed. that announced an additional year to late 2014 of these very low rates and expressed a more open mindset towards other stimulative measures to help growth. The Dow is now close to its all time high of 14000+ in late 2007. No other index has accomplished this miracle. Is the Fed targeting the stock market and creating the next bubble? It is hard to judge what all this means, but it is certainly good to remember that the Dow, now more than a hundred years old, contains only one single stock General Electric from the early days and that one is trading at 1/3 of its high.

So far I have not looked at the Dow Jones Industrial Index. It is relatively easily manipulated and being the “showcase index” probable massaged more than any other index, so it is not my favorite. Nevertheless it is the bell-weather indicator. Surprise, surprise, it is identical to all the others. See below.

Now simple because all indexes appear to be , more or less , at the same stage or phase in the cycle, does not imply that the analysis is more correct. It is like practice – doing the same thing over and over again – does not make you any better if what you are doing is the wrong  thing in the first place.                                                                                                                                                                                                                                                                                  Today’s Toronto Star, perhaps not the preeminent authority  on matters financial but at least a little more open-minded to concepts that are not rabidly capitalist and politically to the right of Idi Amin and therefore well worth reading,  if only as an antidote, features Bill Carrigan’s  “Getting Technical”. I am not sure exactly what he is saying, but it is about EW and I take it that he believes that we are already in wave 1 up. Fair enough, this is what makes markets.  Also he sees EW as an extension of Dow Theory and EW as  “technical” analysis”. (one could argue both points, but that is not now the point).

He says, I quote verbatim -  “The reality here is that any portfolio manager or investment advisor who does not use technical analysis (presumable EW included) to support investment decisions will not survive in this business”.        Now that is food for thought !

Until recently, it was the other way around, perhaps the tide is turning.