BRIEF UPDATE ON THE BROAD STOCK MARKET (11:30 pm EDT)
The broad stock market continues to climb a "wall of worry" (the Iran war), even missing the opportunity to form a significant peak in last month's strong reversal zone (April 21 - 30). This is bullish behavior, but we note that although the S&P 500 and NASDAQ are surging to new all-time highs, the DOW is still below its all-time high from February 10 (50,512). Therefore, a bearish divergence signal is still in place, suggesting a downturn could be imminent. On the other hand, if the DOW can push higher and break that February top, it would confirm the trend is bullish. In that case, we might look to buy the next sub-cycle low. But if the DOW continues to stay below its all-time high, a stronger sell-off could be in the cards, and we would avoid any buying. For now, we remain on the sidelines.
The broad stock market continues to climb a "wall of worry" (the Iran war), even missing the opportunity to form a significant peak in last month's strong reversal zone (April 21 - 30). This is bullish behavior, but we note that although the S&P 500 and NASDAQ are surging to new all-time highs, the DOW is still below its all-time high from February 10 (50,512). Therefore, a bearish divergence signal is still in place, suggesting a downturn could be imminent. On the other hand, if the DOW can push higher and break that February top, it would confirm the trend is bullish. In that case, we might look to buy the next sub-cycle low. But if the DOW continues to stay below its all-time high, a stronger sell-off could be in the cards, and we would avoid any buying. For now, we remain on the sidelines.
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