Today is our June 23rd "pivot point" and the dead center of our reversal zone for equities (and other markets). The broad stock market seems to have lost some of the steam it gained from yesterday's "dovish" rhetoric given by Fed Chairman Jerome Powell in his congressional testimony. The NASDAQ touched a new record all-time high (14,317) this morning, but now it seems to be backing down a bit from there. The S&P 500 came very close to breaking its all-time high this morning, but it too is backing down now. The DOW is significantly below its all-time high, and as I pointed out in yesterday's blog, it has most likely already topped out and is headed down to the final bottom of its medium-term cycle. Thus we now have a strong bearish divergence between the DOW and the other two indices, as well as what seems to be a bearish "double-top" in the S&P 500. This looks like a good time to go short in the broad stock market. I am going to enter a short position now in the NASDAQ because it appears that this index is poised to take the deepest correction. We would like to see the NASDAQ close back below 14,250 by Friday (it is now at 14,287), so we can use that as our initial stop loss parameter.
Crude oil also seems to be topping out now. Early today crude made a new cycle high at $74.25 (August contract chart), and it is now backing down from that top. Our ideal target for this rally was $75, but today is the last day of a reversal zone specifically for crude (June 15 - 23), so it looks like a good time to sell this market short for some sort of correction. I am entering a short position in crude today. Let's make our initial stop-loss warning based on crude closing above $75 this week.