# Dow’s Attractor Level over the past year

Since December of 2014, I have been tweeting that the Dow will orbit around an attractor level around 17,300…

Here is what the Dow has done since then until just a moment ago…

The red line shows the attractor level that I have been seeing. Why did I see this? The economy hit the effective demand limit in the 3rd quarter of 2014. I knew the market could not go much above that level due to a profit limit. I sensed that the economy would slide along the effective demand limit. I sensed that the economy would at least hold onto that level. And I knew that monetary policy would stay accommodative. I knew there would be a correction at some point, but that the market would rise back to the attractor.

When the Dow was around 16,700 on September 17th, I tweeted…

A month later…

With the Fed signalling a rate rise in December. I am now re-assessing the attractor level. The important factor is how consistent the Fed will be over time lifting the Fed rate.