BROAD STOCK MARKET UPDATE (4:15 pm EDT)
Equity markets had a strong rally today which they were entitled to after the shock and fallout from last week's Brexit vote. The rally so far, however, is looking like a "dead cat bounce" (i.e. a short-term relief rally) as the DOW, S&P 500 and NASDAQ have risen up to and are now pushing against strong resistance near the bottom of last Friday's "crash". The longer-term bullish arguments for the broad stock market I made in yesterday's blog still apply, but cycle and timing factors point to a lower bottom either late this week or sometime next week. The targets for the bottoms in these indices could be as low as 16,500 in the DOW, 1,950 in the S&P 500, and 4,400 in the NASDAQ.
Once the cycle bottoms are in we will be looking to go long, but for now I am still holding a short position in this market as I don't think the correction is over just yet. (I may change my mind if this current rally gains some legs.) Some traders may wish to take profits now as we have done well with this short position that was entered on June 8 and is down about 4%, though I think it can drop further. Still holding my short position in the broad stock market.
Equity markets had a strong rally today which they were entitled to after the shock and fallout from last week's Brexit vote. The rally so far, however, is looking like a "dead cat bounce" (i.e. a short-term relief rally) as the DOW, S&P 500 and NASDAQ have risen up to and are now pushing against strong resistance near the bottom of last Friday's "crash". The longer-term bullish arguments for the broad stock market I made in yesterday's blog still apply, but cycle and timing factors point to a lower bottom either late this week or sometime next week. The targets for the bottoms in these indices could be as low as 16,500 in the DOW, 1,950 in the S&P 500, and 4,400 in the NASDAQ.
Once the cycle bottoms are in we will be looking to go long, but for now I am still holding a short position in this market as I don't think the correction is over just yet. (I may change my mind if this current rally gains some legs.) Some traders may wish to take profits now as we have done well with this short position that was entered on June 8 and is down about 4%, though I think it can drop further. Still holding my short position in the broad stock market.
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