Yesterday I thought the Dow might go lower today. Turns out that while the Nasdaq and the S&P did in fact go lower (a bit), the Dow actually rose (a bit). And as you can see in the Dow daily chart here, it formed a dojiish almost hanging man sort of candle. Anyway, this all indicates general uncertainty as to the market direction.Right now, we're getting some guidance from the futures which are all down at 2 AM EST, with the ES down 0.13% and the NQ a bit over half a percent. Also, the VIX today dropped right back to its support level just under 16 but did not break below. This all looks to me like part of the topping process whenever stocks go exponential.
So it would not surprise me to see the Dow decline tomorrow. It's too early to declare the current upward swing trend over since we're still well in the upper half of the ascending RTC but I'd call today's action a bearish warning signal. We'll have to see how tomorrow plays out to see if it is in fact time to go short. In any case, I'm seeing more short term upside risk than reward right now.
No trades today.
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