http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=9&dy=0&id=p05122701352&a=223624367

59 days, 1302.03 points, 11.91% (#3).  This after the laughable  November downwave (2) (which mainly served as a point to give us a reasonable trendline.)  This after a 50 day wave of 1515 points and 15.25% (1).  We have heard people saying “unbelievable”  and muttering that it’s time to short.  This daily slog upward at more or less a quarter of a percent a day is perfectly calculated to keep short hopes alive.  While slowly bleeding to death from the death of a thousand cuts.

But it presents us with both theoretical and practical problems. (*)  The asterisk indicates the option of moving the stop up based on the low of the high day.  Using the low of 12252.24 and a filter of 5% gives a stop of 11640.57 (6% 11518)  We remind you that stops based on new highs are vulnerable to sudden sharp downwaves provoked by short sellers and stop hunting.

We have occasionally talked about the trade based on whim.  That is, no signal, no indicator, just saying my kidneys hurt today I think I’ll hedge.  Or perhaps not even that — just unbased whim.

If you were going to do something like this you might want to do it in the VXX, because that is the volatility play.

And….solar flares!! Headed right this way.  Remember your sun block tomorrow.