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

How to Make the Casinos Pay You for a Change

Greg Guenthner

It's a theme we've shared with you since April. And it's only gotten worse. The gaming industry has come under all sorts of pressure--a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn't long before those cracks turned into gaping holes you could drive a friggin' truck through. That's where things stand today.


How Low Will Oil Go – And What Can You Do?

Matt Insley

The oil market has been under siege for six months. From service providers to producers this downturn has been painful. Of course, we’ve known all along that oil prices were a little toppy over the summer. In fact, when asked just how low oil prices could go I usually answered with a simple “lower than you’d expect…”


Cuba’s Berlin Wall Moment

Peter Coyne

Our forecast that Cuba would be open and integrated within 5-10 years is on track after yesterday's big announcement. Ahead of schedule, even. Click here to see how some investors have profited and what the island's likely future is...


The $4 LED Trend You Don’t Want to Miss

Chris Mayer

The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential -- like parking lots -- have barely begun to change. Banker to the presidents Chris Mayer says you could triple your money in this new tech trend. Here's what you need to know.


Three Time Bombs in Your 401(k) and How to Disarm Them Now

Dave Gonigam

By the time you do… Kaboom! It’s too late. They’ve already blown up your retirement. There are three time bombs the mutual fund industry has planted within your 401(k). By the time you’re done with this article, you’ll know how to identify them. And, more importantly, how to disarm them. Dave Gonigam has the scoop...


Got Tech Stocks? Sell These Flops Now…

Greg Guenthner

The latest victim of the crude rout is none other than the stalwart tech stocks. These are the go-to trades that have held up all year long. I'm talking about stocks like Google, Yahoo! and Microsoft. Like I said before, these aren't no-name stocks you're seeing drop more than 10% from their highs last month.