Mini DJIA Intraday New Record High Update

Besides the SP500 breaking to new world record highs, the DJIA was not about to be left out of the stock party. It also soared to a new record high at 22,135 and has started to back off a bit. If there is more to go it will not surprise me as extensions have a bad habit of fooling us most of the time. 

Since the August 22nd low the Mini DJIA has charged up in a very choppy fashion. Every attempt at trying to count this as an impulse fails. It sure counts out well as a diagonal 5th wave,  and since the 4th wave dipped well into wave 2, then this pattern can become an ending diagonal as well. It’s the same pattern in the SP500 but the DJIA pattern is a bit weaker due to the short wave 3. The deep 4th wave helps to confirm the weakness of the move, which the 5th wave wanted no part of. The last “C” wave soared virtually straight up with just a few small corrections. 

This week all September contracts should end, and I will have to switch over to the December contracts. The big gap on the way down has now been closed off, but another open gap below at the 21,820 price level would be the next big gap that needs to get closed off. Gaps draw and repel prices so they are well worth keeping an eye on when they happen. 

Since a new record high has been broken, then it’s also a good time to calculate a Gold/Dow ratio. In this case we have to ask, “How many gold ounces does it take to buy one unit of the Dow?”  Today it took 16.60 gold ounces. At its lowest the DJIA only took a bit over 7 ounces to buy one unit of the Dow. We could get close to that number again in the next 2-3 years. 

They use Apple as an excuse that keeps holding the stock markets up, and they may be right. Bad news can follow investors, which can trigger a mini selling panic.