According to my risk summation system, next week is a mess. My system is basically broken in this march up. The risk turns are scattered fairly evenly across the four days. To just squeeze a bit of juice out of this stone, the largest concentration is on Wednesday the 18th and Thursday the 19th, but it's only marginally so. Those two lame reading days will have to suffice for a risk window for next week.
Last week the Monday and Thursday risk windows both tagged failed tops, so two for two duds, not a great week for the system, but it may be telling about the underlying strength of this market. My indicator trading system has also been on a weak sell signal as the market has been rising these last few days. This is typical bull market behaviour since in past bull markets it would usually take a seriously strong system sell signal to stop an advance.
My post this past week concerning a downside surprise in the inflation figures also turned out to be a dud. No surprise, the figures were more or less bang on target. The market is using the Alfred E. Newman of Mad magazine fame approach to inflation, What, Me Worry?. Missing out, FOMO, is the new worry, not inflation, that's yesterday's news. Inflating stock prices is the news du jour. This coming week several Fed minions take to the speaking stump, I'm sure, to try to regain control of the runaway happiness which is starting to pervade Wall Street. Even soaring Doc Copper with a big white candle this week is saying the Fed has lost control of the plot predicting a rebounding manufacturing economy not exactly an inflation killer.
If a bull market despite the Fed, then how high will it go you say? Well my approach to VIX makes a prediction. I look at the VIX reading at the most recent low and assume it will be correct in predicting that percent stock market rally off that low. Looking at the plot below near the DJIA low of ~28,660 the VIX reached a high of ~33.5. This predicts a 28,660 x 1.335 = 38,260 high DJIA, or in other words up another 11.5% sometime this coming year, not that big of an ask really if Powell just keeps the pumps running at idle speed.