Summary: Continue to maintain a LONG/HOLD position.
1/23/2014 – An ugly day in the market today with the Dow being down -176 points or (-1.07%) and NASDAQ down -24.13 points or (-0.57%). Please note that the divergence between the DOW and Nasdaq as it continues to increase.
Also, note that the DOW gapped down at the open to the tune of 100 points. That “hole” is still open. If you follow my blog you know what I am going to say next. This opening must be closed before the market can gather up a sustained bear move. The market always closes its gaps. For the time being, this doesn’t change our overall market position. Even thought the DOW most likely topped on December 31st, 2013, technically speaking, the overall market trend is still up. As such, we must wait for a trading confirmation before taking a short position.
Tomorrow I will have a much longer explanation on why my work shows the market has topped out and what you should do about it.
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Stock Market Update, January 23rd, 2014.