The DOW squeeze was ready and it worked (unfortunately on the other side I imagined to…). The 21850 level was easily get past by a gap on Monday and the index enjoyed five daily green candles, regardless of intensifying international issues and weak economic data. The market decided to move on and “shrug off” (very popular phrase nowadays) any existing and potential risks. Volatility decreased back to bottom levels, so business as usual (maximum complacency) and new all time highs reached.
I suspect this will be one of a series to come. Since previous all time highs back in mid August the market has been ranging lower with a maximum drawdown of just above 2% that we can’t describe as a correction. Apparently the DOW is heading higher following the general complacency and gracefullnes. My personal impression is that the market is so scared to fall that keeps on going up. I have highlighted on the chart important levels to keep in mind for a drawback.
