Greg Guenthner

Stocks have hit the snooze button…

For almost two weeks, the Dow Industrials have traded in a very tight range.

How tight?

Well, the difference between the Dow’s intraday high and low has been only 1.35% over the past 13 trading days. That’s the lowest spread since late 1986, according to Bespoke Investment Group.

Of course, the 1986 market pause was one of historic proportions. The low-volatility coil led to a spectacular run-up in 1987 that didn’t slow down until the epic Black Monday collapse that October.

Which way will the Dow break this time around? Is it headed for upside mayhem, or meltdown?

If the broad market has any say in the matter, a breakout to new highs is in the works…

The Broad Market's New Milestone

Yesterday, the Wilshire 5000 — an index that consists of all stocks trading in the United States — broke free of the bear and posted all-time highs. Few people watch the Wilshire — even though it’s one of the best broad market barometers out there. With little fanfare, it breaks free to blue skies…

As for the major indexes — they won’t stay stuck on pause forever. Something will have to give one way or another. As of yesterday, the Dow sits about 1.5% below its all-time high close of 14,164. The S&P has a little more work to do. It’s 3% below its all-time high close of 1,565.

If the Wilshire is any indication, the S&P and the Dow will follow to their respective highs in short order…

Best,

Greg Guenthner
for The Daily Reckoning

Greg Guenthner

Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.

Recent Articles

The Shock Doctrine: When Order Trumps Personal Freedom

James Rickards

When some event - be it a terror attack, financial panic or natural disaster - upsets the status quo, people are more willing to relinquish their freedom in favor of a greater sense of security. And that's when ambitious political leaders make their move... And as Jim Rickards explains, another such event could be right around the corner. Read on...


QE = Debt Cancellation

Peter Coyne

If you’re just tuning in, we’re two parts deep into our three-part conversation with Richard Duncan. Part III continues with talks on globalization, deflation, quantitative easing, the dollar crisis and more. Read on...


Anesthetics That Could Put Us Asleep Permanently

Stephen Petranek

Modern anesthesia makes critical operations possible that few humans could survive otherwise. But according to a new study published in the journal Geophysical Research Letters, some of the numbing agents we breathe may also be significant contributors to global warming.