DJIA Intraday Update.

At this time it looks like the DJIA has peaked and the big question is are we heading into another correction or was this fantastic move just a bear market rally?  Rallies that travel at this speed always seem to run out of steam and then turn and head the opposite way. I show a Megaphone pattern which can happen in diagonal moves as well. The 4th wave rally traveling into the wave 2 positions is a dead give away that we are dealing with a diagonal run of 5 waves.

The Gold/DJIA ratio is down a bit from its extreme but yet still far too expensive. I would like to see our present Gold/DJIA ratio get chopped down to 14:1 before I get super bullish on the DJIA. Of course, many fund managers are frothing at the mouth as they, scream, “Buy the Dips”. DowJones_GoldPrice   Gives you an idea about others using the Gold/DJIA ratio over a bigger time period.

The stock market dip? Keep buying, says Bank of America Merrill Lynch

That might work for short term traders, but for a long term hold the DJIA is still going to get shredded.  If the Cycle degree peak is true, then at a bare minimum the DJIA would have to crash below 14,000. Others are as bearish as I am, and I’m sure many of the wave analysts are forecasting big bearish moves as well.

 

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