BROAD STOCK MARKET TRADE ALERT (2:45 pm EST)
We bought the DOW on Nov. 19's isolated low at 43,243, and from there it rose steeply, but it is now encountering resistance near 45,000. Last week the DOW and S&P 500 made new all-time highs without the NASDAQ, and today the S&P 500 and NASDAQ are making new all-time highs without the DOW. This bearish divergence suggests that a top could be imminent. Even if these indices rally some more, we are about to enter a very strong general reversal zone (Dec. 3 - 12), so a significant top could form anytime in that time frame. But if this market turns down now, we could also see this new reversal zone correspond to a deep low. I'm going to play it safe here and sell my long DOW position now with a decent profit. I will then wait for the next corrective dip. If the current medium-term cycle is an old one, that correction could be substantial. But if a new medium-term cycle started on Nov. 4, we might only see a shallow sub-cycle correction that could be another buying opportunity.
I am selling my long position in the DOW - broad stock market - today.
We bought the DOW on Nov. 19's isolated low at 43,243, and from there it rose steeply, but it is now encountering resistance near 45,000. Last week the DOW and S&P 500 made new all-time highs without the NASDAQ, and today the S&P 500 and NASDAQ are making new all-time highs without the DOW. This bearish divergence suggests that a top could be imminent. Even if these indices rally some more, we are about to enter a very strong general reversal zone (Dec. 3 - 12), so a significant top could form anytime in that time frame. But if this market turns down now, we could also see this new reversal zone correspond to a deep low. I'm going to play it safe here and sell my long DOW position now with a decent profit. I will then wait for the next corrective dip. If the current medium-term cycle is an old one, that correction could be substantial. But if a new medium-term cycle started on Nov. 4, we might only see a shallow sub-cycle correction that could be another buying opportunity.
I am selling my long position in the DOW - broad stock market - today.
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