Dow closes gap
My Equinox Indicator seems to be working this time (see yesterday’s MoneyWeek Trader email). Naturally, this is not a trade timing tool, but it is remarkable how often at the equinox the market finds a top. The odds are high that we have seen a major top of some kind last week in the Dow.
Last week saw the completion of the five up to Thursday’s high. That meant the next move was down – and the market followed that script.
And note the neg mom div at the top! Nice.
But this morning, the market has dropped down to the Fib 38% retrace – and has filled the gap from last week.
Not only that, but we have a new five down:
So what do I expect now? A bounce! Perhaps an A-B-C? That would be good – and my upper target is the underside of the tramline in the 15,500 area.
That would be an ideal set-up for a short trade. I shall watch and wait.
I was a little premature last week going long as the market had further to dip, but it appears the market is ready to rally once more:
My best guess is for a move above the old high at 99.60 and then on to 102 area.
I am looking to go long again.
It appears on the cusp of a large down leg:
Tramline has been broken and has been kissed. I expect a big break soon.
I remain short.
They are following my script – rallying (against conventional wisdom, of course)
I am long from under 129 and have a target at the 131-132 area. But it could get bumpy as we are getting mixed messages from the Fed – and of course, the economic data will induce volatility this month and into October.