BROAD STOCK MARKET UPDATE (4:30 pm EDST)
In yesterday's blog on the DOW I wrote:
"Let's watch for a short-term correction from a top early this week as an opportunity to cover any short positions in the DOW. A good target range would be around 34,000 - 34,200, which would take us close to our entry point from April 26 and give us a chance to exit with very little or no loss."
It looks like the DOW could be putting in a top today as it made a new all-time high around mid-day (gaining 300 points) and then fell into the end of the day, losing all of that early gain and closing in the red. That is very bearish behavior and suggests the DOW will go lower tomorrow. We will wait and see if it can get down into our target range over the next few days. The S&P 500 dropped and closed below 4,200, which brings our short trade in this index to a break-even point. We will probably cover (unload) this position tomorrow if it drops a bit more.
The NASDAQ took a major dive today and is making a new low below last week's 13,439 bottom. It also closed below its 45-day moving average. That's a bearish sign. It looks like instead of last week, we may get a sub-cycle low this week. A rise back above the 45-day moving average would support this idea. Any short trade on the NASDAQ from April 26 now has a profit of about 5%. We will consider covering and taking profits on this trade tomorrow.
We are still short in all three indices, but we are ready to cover any of these positions over the next day or two.
In yesterday's blog on the DOW I wrote:
"Let's watch for a short-term correction from a top early this week as an opportunity to cover any short positions in the DOW. A good target range would be around 34,000 - 34,200, which would take us close to our entry point from April 26 and give us a chance to exit with very little or no loss."
It looks like the DOW could be putting in a top today as it made a new all-time high around mid-day (gaining 300 points) and then fell into the end of the day, losing all of that early gain and closing in the red. That is very bearish behavior and suggests the DOW will go lower tomorrow. We will wait and see if it can get down into our target range over the next few days. The S&P 500 dropped and closed below 4,200, which brings our short trade in this index to a break-even point. We will probably cover (unload) this position tomorrow if it drops a bit more.
The NASDAQ took a major dive today and is making a new low below last week's 13,439 bottom. It also closed below its 45-day moving average. That's a bearish sign. It looks like instead of last week, we may get a sub-cycle low this week. A rise back above the 45-day moving average would support this idea. Any short trade on the NASDAQ from April 26 now has a profit of about 5%. We will consider covering and taking profits on this trade tomorrow.
We are still short in all three indices, but we are ready to cover any of these positions over the next day or two.
RSS Feed