Although one should pay attention to the divergence between HYG and the DOW (see my earlier published idea), a look at the weekly chart of the DOW suggests that if the present strength persists, we are likely to see much higher prices before any meaningful correction or change in trend sets in.
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And here we are, Dow at the top of the channel trendlines and the Fed announcing their decision for a rate hike (or no) later today. Must say that I am completely dumb founded by the strength of this rally. Oh well, let's wait to see what Yellen and Co. will say later.
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Is the DOW sputtering at the trendline resistance drawn or just consolidating before pushing higher? The uppermost channel trendline has the DOW at 21400 - 21600 in January. I'm not for such a view because i) PE ratios for stocks are at nosebleed levels and ii) earnings of corporate America should take a hit from the strong USD.
