I put six indexes in above chart, as well as the US dollar index and Gold. Today Dow closed under 20 DMA but above 50 DMA. However all the other indexes closed under both 20 DMA and 50 DMA, the blue circles in the chart.Russell 2000 Index, Dow Transportation Index, and Dow Jones Financial Index broke their October 2 lows, the red circles in the chart. If the double top pattern in these three indexes are confirmed, prices will turn much lower. I think the major indexes will catch up the secondary indexes, such as $TRAN and $RUT, on the downside to confirm that the trend has changed from upside to downside.
The US dollar index is tracing out a small but very clear 5 impulsive waves up, which can not be seen in daily chart, the green circle. The stock market has been fueled by weak dollar, so a turn up in dollar shall add more downside pressure on equity market.
Also S&P500, Dow and NASDAQ have all closed beneath the up-sloping log scale trend line connecting the March low and the July low. That gives us additional evidence that Primary Wave [3] is likely underway.
No comments:
Post a Comment