Weekly report

Last week I warned that the Dow Jones Industrial Average new all time high had to be respected while the Nasdaq 100 could be shorted with less risk because technically weaker: in the chart below you can see the last 5 trading days with the Nasdaq 100 closing the week in red and the Dow showing once again  relative strength.

Dow vs NDX this week

I was impressed by the "Dow Industrial" strength so I went back to check what happened the last time it broke a new all time high in the summer 2007: when it broke the former all time high of 11750 of  January 2000 the Dow marched 417 points higher for 17 trading days before a small 200 points correction (which did not retest the previous all time high)...the first real correction came only a couple of months later and starting from 1000 points higher....I do not think this is the same situation....the Dow is already 300 points above the breakout level with no corrections and I can't imagine 700 more points to go before correcting, I think the correction is closer  yet I do not want to mess with indexes printing all time highs because the market can remain irrational more than I can remain solvent.

Dow Industrial breakout  of October 2007

I will prudently give the Dow and the SPX some more time to complete this swing: we may be in wave 4 of 5 with some more upside before turning south....see hourly charts below for an updated count.

DIA: for a live chart go to the  technical charts section of this blog 

SPY: For a live chart go to the  technical charts section of this blog 

This manipulated and doped market stinks and I still can't find a single reason (technical or fundamental) to buy it but before shorting it we must wait for cycles to complete their course (the price action will reveal it).

As I have posted ealier I am restyling WSW blog with new colors, a new layout and new sections: I have also added a technical charts section with live realtime charts of DIA (Dow Jones Industrials Average ETF) and SPY (SPX500 ETF)with my wave count and a set of useful technical and cyclical indicators.
Hope you like it! Feedback is welcome.

Have  a nice weekend!