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The Dow: Anticipating the Post-Memorial Day Rally... PRE-Memorial Day!

by Nico Isaac
Updated: May 27, 2020

I'm Nico Isaac and THIS is Chart of the Day

The Dow: Anticipating the Post-Memorial Day Rally... PRE-Memorial Day!

This chart of the Dow Jones Industrial Average reflects the "Post-Memorial Day" rally.

On May 26, the 500-point rally vaulted the Dow to its highest level since early March.

This May 26 CNN Business column paints a celebratory picture of the Red, White and Blue Chips:

QUOTE

"New York Governor Andrew Cuomo rang the opening bell, and traders exulted in cheers. It was the perfect setting for investors' unbridled enthusiasm about the markets."

As for what fueled this Unbridled Enthusiasm -- sources cite two factors:

One, "optimism about the continued reopening" of the world's largest economy

AND

Two, "Vaccine Hopes"

CNN

Marketwatch

Investor's Business Daily

Explained the May 26 Barron's:

QUOTE

"There were two big announcements on the Covid-19 on Tuesday morning. First Novavax said it was taking its vaccine to an early-stage trial. Second, Merck announced its own plans for vaccines and treatments.

"Combined, it points to a world that could one day be free from coronavirus worry."

END QUOTE

Like the article says: Those "big" headlines posted on Tuesday morning.

But was there a way for investors to anticipate the Post-Memorial Day rally -- before the latest vaccine news?

Yes! Before the May 25th Memorial Day, our May 22 Short Term Update showed a version of this E-mini Dow Futures chart, which prepared subscribers for an immediate upturn. It said quote

"This view means that early next week, [the trend] will carry the Dow to new recovery highs. The DJIA's target area is 25,018-25,865."

200526 - RALLy

The fact is: News reports about a COVID-19 vaccine have been circulating for nearly five months. Recall this Fox Business article...

from February 5

Or this

CNBC from March 30

So... let's just say that "vaccine news" is a mighty convenient after the fact explanation for this. Whereas, the Short Term Update forecast the post-Memorial Day rally,

PRE-Memorial Day.

Today, tomorrow, and for months to come -- vaccine talk will stay in the news. For investors, however, the best method to anticipate price trends is Elliott wave analysis.

Find out where the world's largest stock markets headed in the days and weeks ahead with our complete Financial Forecast Service. See below to get started.

When Fast Moving and Volatile = Opportunity

You've just seen the evidence for yourself: Volatile markets offer opportunity. Financial Forecast Service subscribers were NOT surprised -- they were prepared for the "new recovery high" in the Dow on May 26.

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