UPDATE on the BROAD STOCK MARKET (5:00 pm EST)
The broad stock market seems to be continuing its wild roller coaster ride this week as we enter the first day of a market reversal zone that runs through next Thursday. It is still unclear if this market will rally into our target around 16,700 in the DOW and 1970 in the S&P 500 by next week or if it will instead fall to new yearly lows. Today the DOW dove briefly to a low below 16,000 before recovering and closing the day with a 182 point gain near the top of the day's trading range. That is bullish behavior and could indicate that we are still on our way up to our targets (or higher). One interesting pattern that is forming now in the chart of the S&P 500 is an inverted "head and shoulders" bottom that could be signaling at least a short-term rally. (This is not to be confused with the much larger bearish "head and shoulders" top also forming underneath a huge bearish dome pattern in the S&P 500 - see my earlier blogs referenced below). The right shoulder of the inverted "head and shoulders" bottom is just completing and the S&P 500 has to break and hold above 1950 soon for it to be valid. If that happens, we may see both the S&P 500 and DOW rise a bit above our targets. Nevertheless, as long as the DOW remains below 17,000 and the S&P 500 below 2010 we will still be looking for a spot to sell short as a significant correction seems imminent. Please refer to my blog posts from Jan. 20 and Jan. 24 for a more detailed discussion of the broad stock market and why we could be close to a serious correction in equity markets right now. Still on the sidelines of this market.
The broad stock market seems to be continuing its wild roller coaster ride this week as we enter the first day of a market reversal zone that runs through next Thursday. It is still unclear if this market will rally into our target around 16,700 in the DOW and 1970 in the S&P 500 by next week or if it will instead fall to new yearly lows. Today the DOW dove briefly to a low below 16,000 before recovering and closing the day with a 182 point gain near the top of the day's trading range. That is bullish behavior and could indicate that we are still on our way up to our targets (or higher). One interesting pattern that is forming now in the chart of the S&P 500 is an inverted "head and shoulders" bottom that could be signaling at least a short-term rally. (This is not to be confused with the much larger bearish "head and shoulders" top also forming underneath a huge bearish dome pattern in the S&P 500 - see my earlier blogs referenced below). The right shoulder of the inverted "head and shoulders" bottom is just completing and the S&P 500 has to break and hold above 1950 soon for it to be valid. If that happens, we may see both the S&P 500 and DOW rise a bit above our targets. Nevertheless, as long as the DOW remains below 17,000 and the S&P 500 below 2010 we will still be looking for a spot to sell short as a significant correction seems imminent. Please refer to my blog posts from Jan. 20 and Jan. 24 for a more detailed discussion of the broad stock market and why we could be close to a serious correction in equity markets right now. Still on the sidelines of this market.
RSS Feed