Weekend May 29, 2022
My take is that the 2,000 point move in the DJIA is a country trend rally. My position is that the markets have shifted from long time bull to long term bear.
The headlines that the market just nicked bear territory ignore the internals, many stocks like TGT and WMT cited in our article Saturday have turned their trend down, NFLX is another. A majority of the NASD stocks are under their 50 day MAs.
I could not connect to the end of thee red line but you get the idea an ABC correcrion to the upside.
Bear market rallies are impressive as shorts buy to take profits.
The intersection of the downtrend line with the 200 bar MA makes the MA a /likely point of resistance.
Here is the spx exhibiting the same pattern. Notice price exceeds the chance on the downside but not the upside, it's a bear market.
NASD
let's watch to see the action as the various indexes challenge the resistance line.
XLK pretty well imitates the NASD and it has some room to run. But it has also been the weakest of the major indexes.
Let's think bout the next opportunity t enter HEDGE
the ratio graph to HDGE to XLI looks the same but we can see the .23-.25 area is where HDGE should be bought
I do not know that we will get such an oversold condition to buy at such low ratios but let's see. A third of third wave will be unfolding next and we want to be in Hedge when that happens.
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