Chart of the Day - Wednesday, October 30th, 2019

Today’s Chart of the Day was shared on Twitter by Joe Fahmy (@jfahmy). It's a weekly bar chart of the Dow Jones Industrial Average ETF, $DIA. Joe points out that the Dow is attempting to break out of a 21-month consolidation. This is important because the longer the sideways consolidation, the larger the subsequent move tends to be. In other words, the bigger the base, the higher in space! Markets can correct in two ways: through price (sharp sell-off) or through time (sideways consolidation). Some argue that the last 21-months of sideways price action have been a cyclical bear market within a secular bull market. The Dow currently sits less than 1% away from an all-time high. A break out from this multi-month consolidation could mark the beginning of the next leg of the secular bull market.