IMPORTANT BROAD STOCK MARKET UPDATE (11:00 pm EST)
News of China cutting tariffs on $75 billion of U.S. goods (the first phase of the new trade deal - in spite of the ongoing corona virus crisis) is buoying stock markets today. The DOW and S&P 500 edged slightly higher today with the DOW finally clearing it's all-time high of 29,373 from Jan.17 (by only 6 points). This negates our bearish divergence signal FOR THIS WEEK; however, we are still in our reversal zone (Feb. 4 - 13), so if we get another bearish reversal signal next week (one or two but not all three market indices - DOW, S&P 500, NASDAQ - making new highs, then we could get a top and reversal then (it is very late in this cycle and a final top is due now).
We closed above 29,373 in the DOW today so our stop loss was broken and many traders may have covered their short NASDAQ (or other broad stock market) position as I suggested in yesterday's blog. Those traders should remain on the sidelines for now. I held my short NASDAQ position into the closing bell hoping it would turn down sharply near the end of the day, but it did not. It also didn't rally much and did not get above yesterday's high. While this is a good sign that the rally is getting ready to roll over, we can't rule out more rallying tomorrow or even early next week. I would suggest that anyone like me still holding their short position in the broad stock market place a reasonable stop loss on their position now (for tomorrow's open) to prevent excessive loss should the market surge up early tomorrow.
If the stop loss holds and the DOW closes back below 29,000, we will hold our short position into next week. If the stop loss holds and the DOW looks like it will close above 29,000 we will probably cover (unload) our short position manually.
If this is all very confusing just follow the blog tomorrow for any trade alerts.
Wall Street's optimism this week fueled by President Trump's acquittal and China lifting its tariffs may soon be tempered by more worries over the corona virus. The epidemic appears to be getting worse, and this could easily frighten equity markets into a correction soon.
News of China cutting tariffs on $75 billion of U.S. goods (the first phase of the new trade deal - in spite of the ongoing corona virus crisis) is buoying stock markets today. The DOW and S&P 500 edged slightly higher today with the DOW finally clearing it's all-time high of 29,373 from Jan.17 (by only 6 points). This negates our bearish divergence signal FOR THIS WEEK; however, we are still in our reversal zone (Feb. 4 - 13), so if we get another bearish reversal signal next week (one or two but not all three market indices - DOW, S&P 500, NASDAQ - making new highs, then we could get a top and reversal then (it is very late in this cycle and a final top is due now).
We closed above 29,373 in the DOW today so our stop loss was broken and many traders may have covered their short NASDAQ (or other broad stock market) position as I suggested in yesterday's blog. Those traders should remain on the sidelines for now. I held my short NASDAQ position into the closing bell hoping it would turn down sharply near the end of the day, but it did not. It also didn't rally much and did not get above yesterday's high. While this is a good sign that the rally is getting ready to roll over, we can't rule out more rallying tomorrow or even early next week. I would suggest that anyone like me still holding their short position in the broad stock market place a reasonable stop loss on their position now (for tomorrow's open) to prevent excessive loss should the market surge up early tomorrow.
If the stop loss holds and the DOW closes back below 29,000, we will hold our short position into next week. If the stop loss holds and the DOW looks like it will close above 29,000 we will probably cover (unload) our short position manually.
If this is all very confusing just follow the blog tomorrow for any trade alerts.
Wall Street's optimism this week fueled by President Trump's acquittal and China lifting its tariffs may soon be tempered by more worries over the corona virus. The epidemic appears to be getting worse, and this could easily frighten equity markets into a correction soon.
RSS Feed