Rattling of chains.

Volume spikes are usually good signals for a change in direction

After those creaking floorboards in the haunted house (I described this a couple of days ago)we now have the rattling of chains. The Dow has broken right out of the wedge pattern and on Friday rose by 96 points. I am feeling very uncomfortable for, as I explained, I have acted on the judgement that we are more likely to see the end of this bull run than not. Now I have to question my judgement very seriously. And yet....

And yet we have a very sharp spike in volume. Today's chart shows that, with two exceptions (shown by dotted arrows) each volume spike has been followed, within a couple of days by a change in the direction of price movement. That's 2 out of 11 observations (and one of the two exceptions saw a change of direction after five days - purple arrow).

So should I sit here quietly in the dark and keep my nerve? After all I am not losing money, just opportunity to make money. Hard choice.

While I am here whistling in the dark to keep up my spirits I have another straw to clutch. (I love mixing metaphors). We have now more or less hit the previous peak in the market (see dark line). A fantastic place for the market to turn. I wonder if I am right or will I have to  hang my head in shame and change my strategy altogether.

Last Thursday was a very sad day. Dog lovers among you will understand. We had to put down our dog. We got him as a seven or eight year old rescue and he has been with us for almost nine years. In his last months he began to show signs of dementia and he had suffered from arthritis for some time before that. My wife and I have spent the last two days trying to cope with the loss and the emptiness. In the weeks before that we struggled trying to decide whether the time had come. I stayed with him to the last.