All right then -- five waves down from this year's high in the DJIA, and now a three-wave rally back into resistance, looks like it's darn near a .786 retracement, though I didn't figure the exact numbers.
My rationale for selling here is that chart pattern plus waining momentum upwards in the move from March 2003 and in the move up during the last two weeks from the March 2004 low. Can't guarantee that the big, bad bear market from 2000 is still in effect nor that the rally from the 2002/2003 lows is done.
Even if they are not, another leg down like we had from this year's highs is worth trading. If they are, I most definitely want to be short anyway. We may go a bit higher today -- April 8, 2004, or next week, but I think this thing is running out of gas, and the risk to where my scenario is wrong -- this year's high -- is low.
Doug
Low risk sell right now in the DJIA
Started by
PorkLoin
, Apr 08 2004 03:41 AM
4 replies to this topic
#2
DrWu
-
- Traders-Talk User
- 687 posts
Member
Posted 08 April 2004 - 04:33 AM
Very well stated. The risk/reward of a short at this time is about as good as it gets. The 3/24/04 low is a reasonable first target. While a stop above the yearly high is reasonable, it is also soooo obvious that it is likely to act as a magnet. I might consider a tighter stop and let new highs act as the point to reenter the short sell (exceeding the Feb.,2004 highs will setup *hugh* negative divergence in the weekly chart).......good work PL.
#3
mss
-
- TT Sponsor
- 6,182 posts
I'M WATCHING
Posted 08 April 2004 - 06:48 AM
All of my "non-price" based indicators suggest a very weak DOW. However no hint as to how low yet. Keep in mind also that the change in 3 stocks takes place today and may distort the average as well as DIA. My best guess is a "pump & dump" morning and a slide into the close.
Just my opinion, mss
WOMEN & CATS WILL DO AS THEY PLEASE, AND MEN & DOGS SHOULD GET USED TO THE IDEA.
A DOG ALWAYS OFFERS UNCONDITIONAL LOVE. CATS HAVE TO THINK ABOUT IT!!
A DOG ALWAYS OFFERS UNCONDITIONAL LOVE. CATS HAVE TO THINK ABOUT IT!!
#4
PorkLoin
-
- TT Member*
-
- 2,194 posts
Member
Posted 10 April 2004 - 12:26 PM
Hi DrWu,Very well stated. The risk/reward of a short at this time is about as good as it gets. The 3/24/04 low is a reasonable first target. While a stop above the yearly high is reasonable, it is also soooo obvious that it is likely to act as a magnet. I might consider a tighter stop and let new highs act as the point to reenter the short sell (exceeding the Feb.,2004 highs will setup *hugh* negative divergence in the weekly chart).......good work PL.
Yes -- new highs would run a lot of stops, and what worries me the most is the huge long position of Commercial traders in the Nasdaq futures. I do not like to be in opposition to them, and can't believe that a strong Nasdaq wouldn't be accompanied by an upward moving Dow. The last figures I saw are now three weeks old, and perhaps we'll see the Commercials getting out of some longs, but the data is always two weeks delayed anyway (I think) and in that time we can move a long way.
I do expect a "long" move here, one way or the other, soon.
Best,
Doug
#5
PorkLoin
-
- TT Member*
-
- 2,194 posts
Member
Posted 10 April 2004 - 12:33 PM
Good day, mss,All of my "non-price" based indicators suggest a very weak DOW. However no hint as to how low yet. Keep in mind also that the change in 3 stocks takes place today and may distort the average as well as DIA. My best guess is a "pump & dump" morning and a slide into the close.
Just my opinion, mss
If we are still fairly immediately bearish from this year's high, at the least I would look for another decline like we had into late March. That would leave a three-wave correction on the charts, fitting even if overall we're still in the uptrend from March 2003.
Doug
