BROAD STOCK MARKET TRADE ALERT (1:30 pm EDST)
In testimony to the U.S. Congress today, Fed Chairman Jerome Powell seemed to signal that a rate cut is coming soon. This news is bolstering the broad stock market. All three indices (DOW, S&P 500, and NASDAQ) jumped to new all-time highs this morning negating any chance of bearish divergence this week. The S&P 500 also broke above our "line in the sand' at 3,100. It looks like it is time for us to cover our short position in this market (with a small loss - a little over 1%). Yes, the market could still fall now (we are making a top in a reversal zone), but Powell's dovish rhetoric could easily push it higher before this reversal zone is over (next Wednesday). And there is another stronger reversal zone that starts next Friday and runs through the end of the month (July 19-30). A strong rally could keep these indices rising to a new top in that time period. If this happens, it will be another shorting opportunity. If the market does fall now, we will look to buy somewhere near our original target of 26,300 in the DOW. Covering (unloading) my short position in the broad stock market now.
In testimony to the U.S. Congress today, Fed Chairman Jerome Powell seemed to signal that a rate cut is coming soon. This news is bolstering the broad stock market. All three indices (DOW, S&P 500, and NASDAQ) jumped to new all-time highs this morning negating any chance of bearish divergence this week. The S&P 500 also broke above our "line in the sand' at 3,100. It looks like it is time for us to cover our short position in this market (with a small loss - a little over 1%). Yes, the market could still fall now (we are making a top in a reversal zone), but Powell's dovish rhetoric could easily push it higher before this reversal zone is over (next Wednesday). And there is another stronger reversal zone that starts next Friday and runs through the end of the month (July 19-30). A strong rally could keep these indices rising to a new top in that time period. If this happens, it will be another shorting opportunity. If the market does fall now, we will look to buy somewhere near our original target of 26,300 in the DOW. Covering (unloading) my short position in the broad stock market now.
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