|click on images to enlarge|
In honor of this historic occasion, I have represented the very long term DJIA chart above.
If I was long this market, I would be very very afraid. According to this model, this level of divergence was last seen in 1929 where the actual price is so much higher than the predicted price. There are other instances of higher divergences, but they have always occurred on the downside, not on the upside. Of course, "this time it may be different."
I would rate the chance of a significant correction next week to be extremely high. Of course, it is also possible that this particular cycle model may be ready for /dev/null or the bitbucket, or the dustbin. I don't think so - but I'm biased.
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