Hi Joan,
I suspect we have a top here for several reasons.
1) The DOW reached its initial objective of 8150 intraday. This objective is based on my indicators. This price needed to be reached to confirm the minicrash low of 6936 as the low of some substance.
2) More immediately, today, the very day prices reached its objective, the market traded below yesterday's low and above yesterday's high. An outside day at the top of a rally as we've had is ominous. Even if the market closed higher tomorrow, it is likely not to surpass today's highs by much, if at all.
3) There are two previous cyclical tops which connect a resistance trendline. Today, prices came to that line and sold off.
4) The NAZDAQ has formed a bearish coil which projects a measured move to around 1500, the minicrash lows. I don't know how the DOW could sustain a further rally, considering the technical landmarks I've mentioned, if the NAZDAQ fails to hold.
There are a few more exotic reasons, but they all point to the same thing.
All that having been said, I regard this as a likely top, but clearly not a sell signal at all. For the record, I will keep all my long positions into this sell off because it may not sell off. It could just keep going. But, what I do see is enough probable cause to justify a sell off in an overbought condition with reasons to take near term profits if I were trading the quick wave. Of course, it could turn into a hurricane. Then I'ld get an outright sell signal, but not yet.
Have a great weekend. And I know it's only Thursday but who works on Friday?
GZ |
