BRIEF COMMENT ON THE BROAD STOCK MARKET (1:00 am EST)
Wow! The broad stock market took a very wild ride yesterday. The DOW rose 200 points in the morning, fell 200 points early afternoon and then plunged another 350 points in the final hour of trading (3-4 pm). I posted a trade alert to sell short around 2:30 pm just before that final plunge so anyone who took that trade was able to net a little profit. My call was based on the DOW and S&P 500 approaching good target levels for a sub-cycle top, but I didn't think these indices would fall so quickly! Both indices are now well below the stop loss levels that I suggested in the trade alert so traders who did not have time to sell short should stay on the sidelines for now. Because the current reversal zone extends into next Monday, it is possible for the DOW, S&P 500 and NASDAQ to make another bottom near their Feb. 9 lows over the next several days, and possibly with a bullish divergence signal [i.e. one or two but not all three breaking those low(s)]. If that happens, we may take a quick (and small) profit on our short position as the market could rally again. If all three indices break below their Feb. 9 lows then we will likely hold our short position, and those not short could also consider going short for a fall that would last at least into the second week of April.
Wow! The broad stock market took a very wild ride yesterday. The DOW rose 200 points in the morning, fell 200 points early afternoon and then plunged another 350 points in the final hour of trading (3-4 pm). I posted a trade alert to sell short around 2:30 pm just before that final plunge so anyone who took that trade was able to net a little profit. My call was based on the DOW and S&P 500 approaching good target levels for a sub-cycle top, but I didn't think these indices would fall so quickly! Both indices are now well below the stop loss levels that I suggested in the trade alert so traders who did not have time to sell short should stay on the sidelines for now. Because the current reversal zone extends into next Monday, it is possible for the DOW, S&P 500 and NASDAQ to make another bottom near their Feb. 9 lows over the next several days, and possibly with a bullish divergence signal [i.e. one or two but not all three breaking those low(s)]. If that happens, we may take a quick (and small) profit on our short position as the market could rally again. If all three indices break below their Feb. 9 lows then we will likely hold our short position, and those not short could also consider going short for a fall that would last at least into the second week of April.
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