BRIEF COMMENT ON THE BROAD STOCK MARKET (7:30 pm EST)
The broad stock market continued to rally strongly today. The DOW exceeded its high from last week, but both the S&P 500 and NASDAQ did not exceed their highs (they are close). This gives us an intermarket bearish divergence signal inside our current reversal zone. We have a good set-up here for these indices to fall now. If instead they push higher into the end of the week and both the S&P 500 and NASDAQ make new weekly highs, we will cover our short NASDAQ position (and take profits) and stand aside.
It still looks like the all-time highs in the DOW and S&P 500 in early January and the all-time high in the NASDAQ in late November 2021 were long-term cycle highs. If that's true, this correction in equity markets may not be over yet, and these indices could fall a lot deeper than last month's lows. If equities continue to push higher past the middle of next week (the end of our reversal zone), we will wait to see if all three indices can make new ALL-TIME HIGHS. Until that happens, my view of the broad stock market remains bearish. We are still holding our short position in the NASDAQ until the S&P 500 and NASDAQ both make a new weekly high with the DOW.
The broad stock market continued to rally strongly today. The DOW exceeded its high from last week, but both the S&P 500 and NASDAQ did not exceed their highs (they are close). This gives us an intermarket bearish divergence signal inside our current reversal zone. We have a good set-up here for these indices to fall now. If instead they push higher into the end of the week and both the S&P 500 and NASDAQ make new weekly highs, we will cover our short NASDAQ position (and take profits) and stand aside.
It still looks like the all-time highs in the DOW and S&P 500 in early January and the all-time high in the NASDAQ in late November 2021 were long-term cycle highs. If that's true, this correction in equity markets may not be over yet, and these indices could fall a lot deeper than last month's lows. If equities continue to push higher past the middle of next week (the end of our reversal zone), we will wait to see if all three indices can make new ALL-TIME HIGHS. Until that happens, my view of the broad stock market remains bearish. We are still holding our short position in the NASDAQ until the S&P 500 and NASDAQ both make a new weekly high with the DOW.
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