6/5/2024 – Another positive day with the Dow Jones up 96 points (+0.25%) and the Nasdaq up 330 points (+1.96%)
Well, if we look at just the Dow, our primary analytical index, everything makes perfect mathematical and timing sense. Yet, if we consider today’s all new time highs on the SPX/NDX a number of questions arise.
Most notably, why are we still seeing these new all time high on the NDX/SPX?
The simplest answer is that they are completing their blow off or topping process and will soon turn to follow the Dow. Plus, they remain within the margin of error of our original targets. At this point we are not seeing anything to suggest otherwise. Particularly, if we consider the Dow as its development, thus far, has been nearly perfect.
We will re-calculate NDX/SPX over the next few days in an attempt to figure out why we are seeing this divergence and when it will complete.
No other changes to our prior weekly or daily updates……
Let’s first review what had happened in March/April, where we are now and what we anticipate to happen next.
For months, and in the case of the Dow Jones, for 18 months, we have maintained the following price targets.
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- SPX: March 25th (+/- 2 trading days), PRICE Target 5,200 (+/- 100 points).
- Dow: March 25th (+/- 2 trading days), PRICE Target 40,000 (+/- 500 points)
- NDX: March 25th (+/- 2 trading days), PRICE Target 18,300 (+/- 200 points)
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On March 30th we issued the following short-term update (see last week’s update).
We believe we might see the final top on the Dow Jones in the first 60 minutes of trading on Monday (April 1st). Please check our Intraday update on Monday as we might reverse position from long to short at that juncture.
We did get a direct hit on the targets above and the market began to sell-off. Yet, as we have indicated at the time, the sell-off wasn’t structurally sound. The indices left behind a number of structural gap downs that suggested at the time we would get a bounce that would close them all.
Recently, all indices resolved their respective gaps lower and most primary indices pushed to slightly higher highs. Although, the Dow Futures remain below their April 1st high trigger.
So, what are we to make of all of the above?
Recent new all time highs on some of the indices complicate the technical picture a little bit, but not our Time/Price calculations or TIMING metrics. For the time being all indices remain at their targets and well within their respective margins of error. As a result, we have to assume this is a simple short-term double top formation.
Further, May 20th high makes sense in terms of being the top of this bounce. Particularly on the Dow. If the market continues a structurally sound sell-off over the next few trading days, we would begin to get confirmation that the top of this bounce is indeed in. And once that happens we simply revert back to our original forecast.
Having said that, if the market begins to push higher once again, pushing above 40,300 on the Dow, we would begin to question our original forecast. In an attempt to figure out what is actually happening and why the market is not doing what it should. Until that happens, our forecast remains fully intact.
End Of Update ——-