The Dow hit a record high yesterday - 14,282.30 and naturally the press went wild and today it continues. It's like the high school days of hearing about that wild party occurring (unsupervised) at the kid's house where the parents are gone. The Fed's unbridled $85 Billion per month purchase of bonds is the equivalent of the older brother buying unlimited booze for the party.
I have the luxury of keeping financial journals of my investment patterns since October 7th 2004 (now on my 22nd 100 page volume).
Before the last crash, I began to get nervous about the market in October 2006. I was convinced I should exit the market based on a chart showing the NAHB Housing Market Index superimposed on the S&P500 lagged for 12 months (a 79% correlation). If that correlation was correct the market was going to crash. Yet it took another year ( the DJIA increased 2,307 points or 19.4% up) of the "party" before the "police" (Fed/Treasury) showed up and the "hang overs" set in ( the great recession).
So how long will this "party" continue? Another year and 19.4% like 2006? That would be another 2,771 points up to a DJIA of 17,053 sometime in March 2014.
Literally off My, My, My, My, office wall chart!