Each week, we ll bring you a look at the provocative research of James Stack, head of InvesTech Research. The Dow Jones Industrial Average continued to power ahead, setting new record closing highs each day last week, closing just shy of 10,500. Over this same time frame, the Russell 2000 index has also gained about the same amount. The pattern of the rally in the RUT is most unconvincing, and appears to be counter-trend in nature. Peruse the latest commentary by Prudent Bear fund manager David Tice .
All evidence suggests that it is a five-wave structure marking the market s last hurrah.
Both counts portend a sharp drop way back down to the 6,000-7,000 level. Over the last few days, the DJIA has consolidated into a small degree wave 4 triangle, This should be followed by one more strong push to new highs this week to mark the end of the movement from last fall. Or maybe it will be as the salvation of the Clinton legacy. Indeed, it is fascinating to watch it all unfold, live via satellite television and the Internet, like no war has ever been covered. The former Vietnam War protestor turned Commander in Chief is thoroughly enjoying his new role.