Technical Analysis of Stock Market Patterns is most certainly not a formula driven exact science. However one tries to detect major repetitive patterns and apply them to the current situation to perhaps gain some insight into possible upcoming patterns to be aware of.
Expectations were that the 2008 index highs would not be exceeded; however, they have for the US based stock market indexes. Peter Grandich brought the following big picture analysis forward some time ago before current index prices exceeded the 2008 index highs.
Chartwise, one can extrapoliate that the DJI could easily rise another 10% before hitting the top of the huge Megaphone Top formation that has been devloping since 2000.
A bounce downward off the top trend line of this Megaphone Top Formation could signal a major forthcoming multiyear Bear Market.
Personally I remain very cautious with 30% of total in short term cash equivalents.
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