As we stand nearly 3 months later from my last post on $DJI everything I thought would unfold up til this point has done so.
How-ever the top I originally called for ($26145) has been surpassed as there seems to be no slowing down in sight. Word around the block seems everyone and their moms are making money in stocks but will thing continue? This is backed by the fact that retail trading apps such as Robinhood have seen the largest influx of new users to date. As we know history tends to be on the side of institutional investors and not retail. I have a hard time coming to grips with price just rocketing passed new highs without a significant retrace. Lets dive deeper.
From a fundamental stand point the price movement has definitely defied the odds. Even with a global pandemic prices just continued to move up. With help from the FED injecting cash into the market of course but I feel a sense of FOMO starting to kick in on the retail side. With the economy slowly opening up and unemployment rates down to 13% from 20% confidence is also playing a factor here. Greed will be the ultimate indicator here from a fundamental stand point. To me the ultimate path of destruction would be a break of all time highs and a swift move back into the range. This type of move would get the news talking and thus insight sort of a euphoric type of environment. If you are not aware by now markets turn when there is euphoria or a lot of greed and on the flip side when there is a lot of fear and worry. I am starting to get that sense and if price can poke over ATH retail would be become overly confident as they hope for a new paradigm.
Looking at the charts I cannot buy into their feelings and ultimately wont buy into a break of ATH or even now. The charts are telling me something from a structural stand point and we are missing some things to complete the idea that was presented a year or so ago. The structure studied will also poise for the best market maker opportunity to really sucker in people at the exact wrong time just before the market turns. There is no telling how how this push will go and the chart below represents the PA movement i expect to happen not the exact price levels. This is setting up for the ultimate rug pull but we must stay patient and let the charts develop. Dont be a hero trying to short the top we can afford to miss 3-5% on a 20-30% move. A loss of 2600 would make me throw out the test of ATH and thus my idea below will have commenced. A retrace is needed but there is no real level we can pick out with supreme confidence. Remember to always practice good RM and never risk what you cant afford to lose. Most of all, have a plan, then trade it! Cheers