All three broad stock market indices took a big dive on Monday. This suggests that the correction we've been waiting for has started. But Tuesday's and today's strong snap back is calling that into question. A one day correction is really too short to be a significant sub-cycle correction for the DOW. Also, Monday was a bit too early for the NASDAQ's final bottom. That could mean the correction will resume shortly, or all three indices will push to new highs. Right now, I'm favoring the idea of them falling further. The DOW still has not exceeded its all-time high of 35,091 from May 10, so a strong intermarket bearish divergence signal is still in place. Our short trade in the NASDAQ from July 8 is now just a bit above the "break-even" point. I am going to hold this position for now with the expectation of the NASDAQ dropping back below Monday's low.
Crude oil made a new low yesterday in the center of a reversal zone specifically for crude, and it is rallying strongly today. A significant cycle or sub-cycle bottom could be forming here. We sold crude short on June 23 and have a small profit despite today's rally. Let's cover this position today and see how far this rally will go from here. Unloading my short position in crude today.