Last week the NASDAQ and small cap Russell 2000 had a great week, yet the DOW is lagging, just can’t breakout the 31,200 level on closing basis. The weekly oscillators have turned down despite the DOW making a new intraday high last week. The DOW’s highest weekly closing occurred two weeks ago. Why the divergence?
The DOW met 31200 resistance last week and the weekly cycle oscillators promptly turned down. Even though the last week’s low didn’t penetrate the previous week’s low to produce a swing high, but the mere fact that the weekly cycle oscillators have turned down is enough to call this weekly cycle top in place.
The DOW closed at all time high last Friday while the US capital was under mob attack on Wednesday. The bull market doesn’t care whatever happens on the main street. It cares only about the money, when there is so much money on the sideline, it has to go somewhere!
The DOW closed at 30606.48 at the 2020 year end which is bullish but not in a breakout position. In order for the DOW to be in a breakout position, it had to close above 31291 to carry the market higher with momentum. The S&P 500, NASDAQ and small cap Russell 2000 index are all in confirmed
Last week the S&P 500 closed at a fresh new high while waiting for the stimulus package. The main street is suffering from the pandemic, yet the stock market doesn’t care. The stock market has made up its mind that it is a bull market no matter what!
