The market continues its upward march. After showing sign of a possible non-confirmed high might be in the making, it reaffirms its desire to move to higher level. The small caps Russell 2000 index is once again making new high along with the SP500 and the DJIA, even the DJT participated with the recent new high party until the last trading session, May 11, 2013. On May 11, the DJT failed to make a new high while all other major market indices made new high. This failure could be simply another temporary divergence between the DJIA and the DJT or it could be the final warning from the Dow Theory to alert us to prepare for the imminent market top.
As the market has displayed time and time again, those that try to call the market top will be reminded who is the boss and will get punished, and those that exercise diligence and patience on listening to what the market has to say will be rewarded. At the present time, the market continues to punish those going against the prevalent trend. Let’s remind ourselves, the market topping out is a process and not an event, and it does not just reverse itself on a dime. The market has to complete the process of money transfer and risk transfer before it changes course. This transfer process takes time and as this process progress, the attuned students of the market will see this process play out. Until the market start showing signs that it is in the final stage of this transfer process, one should continue to ride the trend cautiously or head to the sideline and observe.
Here is a video that review the recent market price action and highlight some of the intermediate key levels the market might be targeted.
Click here to view the video if you do not see a video player on your screen.
