Dow Rallied 3,181 point since November 15– 7 month– 3200 pt rally

  • Posted on: June 21, 2013

We were very over due for a correction in the stock Indexes.  In the Dow, yesterday’s low of  14,729 was not completely un expected.   We took out the old June 6th low by just 100 pts.
If you go back, I suggested buying that break as well.

I’d be buying breaks, but with very tight sell stops.

We might end up w/ a flush back to 14,400, however, I would definitely take advantage of that break and re-own.

For the bears: The rececent high at 15,523 on May 22nd capped off a little bit of a rally in Dow Futures.

Since 11/15—–3,181 pts

Since 12/28—-2,821  pts

Since 2/25——-1,905

Since April——1,124 pts

Technically,  If you take the Feb low at 13696… Then yesterday’s low was just a 38% retracement of that rally.

If you start at the December low of 12,702…. We have had just a little more than a 25% retracement.

I would be an aggressive buyer at 14450 and again at 14115 and again at 13781.

For now,  my dow strategy is changing from sitting tight w/ trailing sell stops, towards establishing shorts by selling into new highs.     Its only June 21… We still have to get through July 4th weekend, and then the whole month of August.   In August,  the market will dry up liquidity as Europe goes on Vacation and a lot of people even here in the US go on vacation for at least a week.  In Europe, they take most of the month.

So. Sell rallies. Look for hard breaks to cove shorts and play a bounce to the upside.  This Dow market may give us lots of trading chances over the next 6 months.

CER