The broad stock market closed very bullish on Friday with all three major indices making new weekly highs on Thursday and Friday. Although only the S&P 500 and NASDAQ made new ALL-TIME highs, the DOW rallied strongly on Friday, and it is getting very close its all-time high of 35,091. It looks like the DOW and/or the S&P 500 may have started new medium-term cycles from their lows on June 18. If that's the case, they could be quite bullish now (at least short-term). The NASDAQ, however, still seems to be near the end of its current medium-term cycle and is thus ready to correct down strongly to its final cycle bottom.
So what does this all mean? Well, it suggests that all three markets could push higher right now. We are coming to the end of a reversal period for equities on Monday, but Tuesday starts another (stronger) one that continues into July 7. This week also leads into a big holiday week-end in the U.S. (Fourth of July). Stock markets are often bullish into holidays. Because these indices seem to have blown through our June 23 "pivot point" without batting an eyelash, it would not be surprising to see them continue their rally into the July 4th holiday before taking any significant correction. The question now is whether or not we should hold our short position in the NASADQ which we entered in last Wednesday. Although it is late in the NASDAQ's cycle, we could still see a strong and steep rally to its final top (unless it happened last week), and possibly even a "blow-off" top before this index turns south and heads to its final cycle bottom (now due anytime over the next six weeks). Because of the possibility of more strong rallying, I am going to cover (unload) my short position in the NASDAQ now (for tomorrow's market open) with a small loss of less than 1%. We will plan on going short again possibly later this week, or even better, early the following week if we see more intermarket bearish divergence signals (e.g. the DOW NOT making a new all-time high, or if it does, not being accompanied by the S&P 500 and/or NASDAQ).