A somewhat rare ending diagonal triangle has formed in the Qs on the hourly chart. As I suggested yesterday, a top at the June 12 turn date would not be surprising. The first target is the June 3 low of 35.93. After that the fib retracement targets are 35.68, 35.21 and 34.73. The May 6 high of 35.34 will provide support. It will take a drop below the May 20 high of 35.04 to confirm a deeper correction toward and possibly below the May lows. Otherwise, any pullback that holds above 35.04 could be a 4th wave from the May 13 low of 32.96. This, obviously, would mean one more high before a deeper correction.
Given the pattern completions occuring in other markets as discussed in previous posts, we may see some sharp selling near term. Assuming today's top marks the top of a b wave of a flat correction, the obvious dates to expect a bottom would be June 19 and June 22, the Friday and Monday on either side of the summer solstice, which often coincides with market turns. The next turn date is June 26. So, we are likely looking at one to two weeks of selling if the above analysis is correct.
I was stopped out of TNDM today as it continued to crater. It seems the IBD names, high RS leaders, keep getting sold, which also occurs near tops. At this rate I will be flush with cash once this correction runs its course.
Gold is setting up a bear flag and looks to be going lower.
The Dow reversed right at its 200dema today.
The Qs are only one to two days away from completing a golden cross, the 50dema crossing up the 200dema. This is bullish for the intermediate term, but may be bearish near term, as discussed previously, in agreement with the expectations of a top today.
So far I am still 1/4 long the QID and now also the TWM. I will look to add to these positions on further weakness in the indexes.
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