BROAD STOCK MARKET UPDATE (11:30 pm EDST)
The broad stock market may have gotten a bullish kick from last week's dovish rhetoric from the Fed. But despite a rally in equities today, we are still in a reversal zone (it ends Wednesday), and we are still seeing strong intermarket bearish divergence signals. The NASDAQ made a new all-time high today while both the DOW and S&P 500 are still below their all-time highs from February. The S&P 500 did make a new monthly high today, but the DOW is still below its July high of 27,071. If this market doesn't turn down by Wednesday, it could push up into our next reversal zone (Aug. 12 - 19) and form a top then. It's hard to tell what's buoying this market right now. Besides dovish cooing from the Fed, recent news that a COVID-19 vaccine might be available in December could also be fueling optimism on Wall Street, although that news could be tempered by the pandemic's recent "second wave". Our stop loss points - 27,071 on the DOW and 3,280 on the S&P 500 - have not yet been breached so I am going to hold my short position in the broad stock market for now.
The broad stock market may have gotten a bullish kick from last week's dovish rhetoric from the Fed. But despite a rally in equities today, we are still in a reversal zone (it ends Wednesday), and we are still seeing strong intermarket bearish divergence signals. The NASDAQ made a new all-time high today while both the DOW and S&P 500 are still below their all-time highs from February. The S&P 500 did make a new monthly high today, but the DOW is still below its July high of 27,071. If this market doesn't turn down by Wednesday, it could push up into our next reversal zone (Aug. 12 - 19) and form a top then. It's hard to tell what's buoying this market right now. Besides dovish cooing from the Fed, recent news that a COVID-19 vaccine might be available in December could also be fueling optimism on Wall Street, although that news could be tempered by the pandemic's recent "second wave". Our stop loss points - 27,071 on the DOW and 3,280 on the S&P 500 - have not yet been breached so I am going to hold my short position in the broad stock market for now.
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