Once again, 20 weeks of time have developed at one price AND the market has climbed above that level (of 129) signaling an advance for the next 20 weeks.
The DIA has price resistance from old highs and therefore will likely chop sideways for the better part of the year, with sharp sell-offs to keep the short sellers happy and for to break but without causing any problems.
The market is supported by a bloated bond market and the money that will flow OUT of bonds and into equities over this year. The stock market is RESTRAINED by higher crude oil prices (see my previous forecasts) and higher tax rates, both on income and capital gains. Weak economic growth also impedes market gains. The heavy cash position of corporations will support the market through stock buybacks and new debt financings, coupled with take-overs and mergers. The side-ways chop I am forecasting is the best way to confuse the most amount of investors and proceed along the path of least resistance, which is sideways to up.
Tim West, Feb 1, 2013