It's time to move out to the weekly chart on the Dow to see what might be ahead this coming week, the last trading week of the month. Here's a year's worth of action for your perusal. There are two things that stand out. First, we remain solidly in the rising RTC going all the way back to the end of August, and second, there's getting to be a lot of similarity between the current pattern and the February to April rally which ended very close to the current levels. The resistance at 11,258 is not to be overlooked.
Although it's too early to call an end to the current rally, it is definitely worth noting how overbought all the indicators are now looking, and also how the dollar has stopped its decline in the past week. I wouldn't be surprised if we got another 200 point drop sometime this week, but it's impossible to call it right now. As a swing trader, I'm trying to be less concerned with individual one day moves and look more at the overall short-term trend.
If the Dow stays around its current level (11,132) for three more days, that will take us to the lower edge of the RTC channel and setup for a trend reversal. A one day drop to 11,090 will do the same thing. I'm not going to try to call the top, but I will try to call the end of the trend using RTC analysis.
It might happen this week, but it's looked like a possibility for several weeks already and hasn't happened yet. Still, I'm starting to see more risk than reward in the current environment and it's getting harder lately to find anything that looks like a decent buy. It looks to me like the road higher is going to be a tough slog from this point.
That's about it. Trade well, do well, be well.
It was a pretty blah week overall for me. I ended the week down 0.49% while the Dow was up just a bit. But I am still up 21.93% year to date which puts me on track for a 34.6% annualized return, very near to what I realized last year. Also, since the Dow is up just 6.76% YTD I'm currently beating the Dow by a decent margin.
I had one good trade in Lowe's last week, netting a quick point in two days. My AUY play didn't fare as well - if it doesn't perform tomorrow, it's see ya. My cheapo dividend stocks (AOD, CIM, NRF, RSO, SPIL) continue to do well.
As always, this isn't investing advice, just a point of reference you will hopefully find interesting. I'm retired, I work for no one other than myself. There's no ads on this site, I am beholden to no one. I will always disclose my position in any stock I mention here, or my association to any product I may talk about. My performance numbers are honest (really, if I was going to lie about it, would I claim to be up merely 22%?) What you see is what you get.
In the 3rd inning of a market cycle advance
12 hours ago