So many guys are trying to call the market top in an up trending market. Sure, any swing top could be the top, but calling the one is a low probability bet for obvious reasons. Usually major tops are a process and they need time to develop. For example one could argue that German DAX is currently forming a major market top. We’ll see if that will be the case. But there is no sign of a major market top in the US stock indices yet.

And DJIA closing at a new all time highs, surpassing this January’s high, is anything but bearish. Breadth indicators are also not telling a bearish story. And what if there is a bigger risk of a melt up, rather than an imminent crash?

I wouldn’t exclude this case and neither should you. Sure, stock market is in the later stages of a bull market in my opinion, but does this mean it should crash? If it does, I won’t be stubbornly holding to my holdings. And before we see any serious deterioration it’s hard to join the doom and gloom side. When that happens I will be more than happy to short it.

So, what is Dow Jones Industrial Average saying then? Let us take a look at a daily chart.

As said before, DJIA just surpassed its January’s high. And if it is above 26,400 we want to be long the index with a target of 28,600. This is 10% higher from the current levels. If the price gets below that I’d advise to be defensive short term.

Get in touch if you’d like to discuss this topic in greater detail.

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