After the Memorial Holiday, the U.S. market resume trading and it opened strongly with the DJIA up more than 200 points at one time, then the market started to retreat and the DJI gave back half of its gain to close at another all time high at 15409.40, +106.30 for the day. The SP500, Nasdaq 100, Russell 2000, and the DJT closed with a gain for the day as well, but they failed to close at a new high.
(click on the chart to get an enlarged view)
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| Indices |
Today is the second consecutive new closing high by the DJI that did not get confirmation from the DJT. Today’s Dow Theory non-confirmation along with all the other indices failed to confirm the DJI new closing high is a red alert. In addition, the Advance/Decline and the new high/new low market breadth indicators are also putting up their alert by demonstrating divergence.
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| DJI, A/D, new H/L |
This latest market price action does not mean an immediate market selloff. The DJI could still continue to move higher and put in additional newer high while the rest of the market continues to retreat. Or the DJI could pull back and let the rest of the market catch up before the market march to another new high.
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| DJIA |
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| SP500 |
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| Nasdaq 100 |
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| Russell 2000 |
In the meantime, continue to trade cautiously while waiting for the market to either re-affirm its upward trend or waiting for the DJI to top out.
Disclosure: Long AAPL & BBRY Call Spread, hedging with SH & QID.
