6/11/2024 – A mixed day with the Dow Jones down 120 points (-0.31%) and the Nasdaq up 151 points (+0.88%)
The divergence between the Dow and the NDX/SPX discussed in our weekly update continues. Most of today’s gain was driven by Apple’s rise. Yet, the rise in the SPX/NDX hasn’t been sufficient enough yet to suggest they are indeed going to those higher targets (see below). Plus, we are nearly within the range of a June 16th (+/- 2 trading days) TIME turning point.
What are we to make of all of this?
Well, as of today, there is very little to add to our weekly and prior daily updates. Let’s review.
If we are looking at the Dow only, our primary analytical index, it is developing perfectly. We had a direct hit on our April 1st (futures never went higher) Time/Price turning point and a nearly perfect double top formation on our May 17th (+/- 2 trading days) TIME turning point. Further downside going forward, particularly a break below 37,500 would confirm the matter. We also have nearly identical setups on the NYA/Russell 2000.
So, what is going on with the NDX/SPX and their recent new all time highs?
The easy answer would be to dismiss these tops as they are occurring well within the margin of error or our previously discussed projections for these indices. And if so, we should resume downside in the upcoming week and simply follow the Dow. Yet, they are beginning to push at the margins of these calculations and I am not a big fan when such divergences develop.
As a result, we have re-calculated these indices during the week. Unfortunately, we were not able to get a clear reading. Once again, we can easily argue either case. A reversal now to follow the Dow or a potential slightly higher high.
Let me show you what I mean with this Nasdaq chart.
If you notice the thin green line, our new calculations (intersection points of multiple time frames/calculations) put the final projection there. At 18,200 to 18,370. June 16th (+/- 2 trading days) is a fairly good TIME turning point for the Nasdaq as well.
Another 1,000 points higher?
Not so fast. Other calculations on the SPX/NDX suggest, as I have mentioned earlier, we are topping right now and should follow the Dow soon. Plus, the Nasdaq tends to be the least accurate if we consider precision. At times it doesn’t arrive at its final destination points. The same cannot be said about the Dow.
So, what are we to make of all of the above?
At this point, I would simply follow the Dow’s perfect unfolding and suggest the NDX/SPX are simply topping as we speak. Yet, if the latter indices continue to rally next week and push 2%+ higher, I would suggest they are indeed going to those higher targets (on the chart above). Now, that doesn’t mean the Dow will go higher, but rather, we are dealing with a more complex topping process. Something tops are notorious for.
Once this topping process completes itself the market will shift gears into a severe bear.
End of Update ————