What the heck are these things? None of them are alike, but one is a lot different than the others.
First, the NASDAQ is at all time highs and really does not show any signs of slowing down. Price is stretched way above the 200 day moving average, and the 200 DMA is pointed steeply higher. The S&P is basically flat, unable to take out the June 9 high. The Dow cannot overtake the 200 DMA and the DMA is downward sloping. The Russell 2000 (small caps) looks even worse.
Normally, I would say that stocks are on day 10 of it's daily stock cycle but obviously all the index's are doing their own thing now. It's really anybody's guess what stage of the stock market cycle we are on. Ordinarily what would drive my analysis behind the stock market would be the fact that on day 9, the S&P was rejected from the pervious cycle high from back on June 9. This would ordinarily seem to be some major resistance around 3230.
Cycles wise, we know stocks should have a DCL in late August. The next daily cycle decline would ordinarily look normal, and ordinarily I would say it could top here at this 3230 level.
But there is nothing ordinary about the NASDAQ. At these levels, it looks more like a crash candidate.
There is a part of me that wants to believe that tech stocks are getting ready to take off in a similar fashion to the NASDAQ back in 2000 at the peak of the Dot Com bubble. The dot com bubble was fueled by a revolutionary new technology called the internet, combined with an explosion in personal computing fueled by the Y2K fraud that caused every business and individual to feel compelled to go buy a new personal computer. Those old enough to remember that mania will never forget it. Just for perspective though, we are a long way from reaching those crazy levels.
So I really don't know what is about to happen but my gut is telling me we will probably have another crash type of event that would correspond with the ICL, but again I really don't know. Anything could happen, especially when you consider how different all the indexes look. We won't be recommending any stock trades for now and are looking for safer set ups such as wheat and cocoa.
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