7/17/2024 – A mixed day with the Dow Jones up 243 points (+0.59%) and the Nasdaq down 512 points (-2.77%)
We were unable to finish our set of calculations, but should have it available before the market opens tomorrow.
Today’s market action was ugly as it points towards the scenario where we see a higher high on the Dow at around 42,500.
Today’s gap down opening on the NDX/SPX was definitely net negative as it suggests the market will come back to close it. If the sell-off was structurally sound we could have argued that some indices are confirming these tops. Unfortunately, it wasn’t. Today’s opening is a clear indication that the market will come back to close this gap down.
And assuming no reverse divergence will take place, this type of a bounce should push the Dow above 41,500 and into its next point of force located at around 42.5K. Well, we can already argue that today’ s top on the Dow is beyond its margin of error and already signaling this 42.5K juncture.
When we combine these points, the probability that we’ve shifted gears into this higher point of force has increase drastically. I would say to 90-95%. And while the SPX/NDX might be signaling our anticipated reversal around this July 19th TIME turning point, today’s substantial gap down makes it unlikely. Unless, we close it over the next 2-3 trading days and then reverse down again.
Once again, we should complete our calculations for the rest of the indices by the time we open up tomorrow and that should provide more clear guidance.
One more point of interest. If we do go to 42.5K on the Dow, this opens up a possibility that the next move down can be as much as 30,000 points on the Dow Jones.
The rest of the discussion we had yesterday remains entirely the same. Please review it below to ascertain the full extent of today’s market action and what it means.