Recap Amazing gap up on Tusday that induced heavy selling in the underlying stocks all day. The reject of Y+1 was clean and that leads to Y-1 target. Dow then spent the next 2 days printing a bear flag. By Friday the Y-0 resistance was confirmed and a flush to Y-1 has completed. Closed the week below Y-1 and at week low.
Outlook Blow-off top from the week before last was almost invalidated last Tusday when the governments intervened over the long weekend. Instead of business as usual like the past several months, Dow closed at the low of the week confirming the topping signal.
2 bearish scenarios emerged from this really messed up swings.
First, double top formation points to a drop to 14800 area.
Second, multiple legs pullback where 2 legs are already done with the 3 one starting from 15200 will give us 14900.
All government officials and central bankers will do what they do best this week to stop Dow from going below 15000 unless they are willing to admit what they are doing now is wrong. Would they?
So beware of that if you are playing the short side.
Dow 30 Jun 03 to Jun 07 Outlook
Lawrence’s Comment
Amazing gap up on Tusday that induced heavy selling in the underlying stocks all day. The reject of Y+1 was clean and that leads to Y-1 target. Dow then spent the next 2 days printing a bear flag. By Friday the Y-0 resistance was confirmed and a flush to Y-1 has completed. Closed the week below Y-1 and at week low.
Outlook
Blow-off top from the week before last was almost invalidated last Tusday when the governments intervened over the long weekend. Instead of business as usual like the past several months, Dow closed at the low of the week confirming the topping signal.
2 bearish scenarios emerged from this really messed up swings.
First, double top formation points to a drop to 14800 area.
Second, multiple legs pullback where 2 legs are already done with the 3 one starting from 15200 will give us 14900.
All government officials and central bankers will do what they do best this week to stop Dow from going below 15000 unless they are willing to admit what they are doing now is wrong. Would they?
So beware of that if you are playing the short side.
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