I would like to correct an error I made in Friday's blog on the broad stock market when I wrote:
"Tuesday's bullish divergence signal has been negated as both the S&P 500 and NASDAQ made new weekly lows yesterday (the DOW did this on Tuesday)."
In fact, the S&P 500 made a new weekly low on Thursday, but the NASDAQ did not make a new weekly low. We therefore still have a bullish divergence signal in effect. This is significant because last week's lows were close to the lows of April 2 and February 9, and we could be seeing a bullish "triple bottom" forming here. Last week's lows were not in a reversal zone so it is more likely we will see another lower bottom in next week's reversal zone (which begins on Tuesday), but we will need to watch our stop loss points (24,859 and 2,718 in the DOW and S&P 500, respectively) for our short positions closely next week. If they break, it is possible the triple bottom bullish scenario is unfolding, and we would want to cover our short positions.
Holding my short positions in the broad stock market for now.