The volatility index is near all-time low suggesting a lack of fear.  My guidance is  one of CAUTION, trailing stops and above all harvesting PROFITS.

Since the 2008 financial debacle the current market environment has experienced a 9.7K point rally from it’s low of March 2009.  As technicians we look for trend similarities and attempt to see if history will repeat itself.  A comparison to the current market exists is the 1925 – 1929 stock market.  The 4 year advance in “25 – 29” has similar characteristics as the chart pattern of 2009 – 2013.

Both markets had triple tops in a 6 month calendar year.  Both markets pierced the overhead supply making new all-time highs. With that said the known, in 1929 the financial market crashed.  As always the future – the unknown -  2014 will history repeat or will the markets experience new cycle highs?

Over the past decade we have experienced 2 four year Bullish markets.  The markets in 2003 – 2007 & 2009 – 2013 have seen similar chart patterns and advances. The charts show a 50% advance in both time periods.

Now, we might be in a new six year cycle change based on the 2002 & 2008 Bear market declines.  Both markets corrected fast and furious 30% and 50% declines respectfully.  A bear market is defined as a 20% drop. If we are in this new cycle which could begin in 2014 and history repeats,  we  could see the Dow in 13,000 range.

Again, my guidance is  one of CAUTION, trailing stops and above all harvesting PROFITS.