BRIEF UPDATE ON THE BROAD STOCK MARKET (3:00 pm EDT)
After Monday's sharp drop, the broad stock market looks like it wants to rally some more this week. Both the S&P 500 and NASDAQ have recovered from Monday's losses and are making new all-time highs. The DOW is also rallying, but it is still below its all-time high, so our strong bearish divergence signal is still valid. We are also near the center of our second strong general reversal zone (July 9 - 18). A strong downturn could be imminent.
On the other hand, the DOW is quite close to its all-time high of 45,074 (about 350 points away), so it has time to breach that high this week or next week. If it does that, our bearish divergence signal would be negated. We could still get a top and subsequent correction, but it may be modest and quickly followed by more rallying. We will keep a close eye on this over the next several days. I am still on the sidelines of this market.
After Monday's sharp drop, the broad stock market looks like it wants to rally some more this week. Both the S&P 500 and NASDAQ have recovered from Monday's losses and are making new all-time highs. The DOW is also rallying, but it is still below its all-time high, so our strong bearish divergence signal is still valid. We are also near the center of our second strong general reversal zone (July 9 - 18). A strong downturn could be imminent.
On the other hand, the DOW is quite close to its all-time high of 45,074 (about 350 points away), so it has time to breach that high this week or next week. If it does that, our bearish divergence signal would be negated. We could still get a top and subsequent correction, but it may be modest and quickly followed by more rallying. We will keep a close eye on this over the next several days. I am still on the sidelines of this market.
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