The DOW has finally made a new all-time high this week...BUT...the S&P 500 and NASDAQ don't seem to be sharing the DOW's bullish enthusiasm, at least not yet. In Tuesday's blog I wrote:
"Even if the DOW pushes to a new all-time high over the next day or two (it is close and, unlike the S&P 500 and NASDAQ, it seems reluctant to fall), we will still have bearish divergence as long as the S&P 500 and NASDAQ do not make new all-time highs"
Both the NASDAQ and S&P 500 did not make new highs today, so the bearish divergence continues. The S&P 500 is close to a new all-time high, but the NASDAQ is well below its all-time high and would have to jump over 500 points tomorrow to exceed that high (unlikely). We will have to wait until next week to see if our bearish divergence signal. will be negated. The cycle pattern in the DOW is a little unclear now, but the S&P 500 and especially the NASDAQ have likely started sub-cycle corrections from their April 29 highs, and both could go lower.
Anyone who has shorted the NASDAQ has a gain as it has fallen about 500 points from our short trade on April 26. Our short position (from April 26) in the DOW is now a little over a 1% loss. Our S&P short (also from April 26) is about break-even. Traders may cover (unload) any of these indices based on their loss tolerance.
I still think there's a good chance that the S&P 500 and NASDAQ will go lower and the DOW will follow. I am therefore holding my short positions in all three indices for now.