In the free webinar I did last month, I talked about the concept of comparative strength and weakness. The potential for a market turn increases when the three main US markets (S&Ps, Dow, Naz) fail to remain in sync with one another. I think that is likely happening now.
The Dow Jones Industrial Index (represented here by the Dow futures contract, YM) had been leading the rally for the past several months. During this last week, it is having trouble making new highs along with the NQ and ES. This can quickly correct itself, so confirmation is needed, but the other two markets are showing weakness, too, despite their new highs (low volume and narrow ranges for today).
Watch for all three markets to decisively start trading below their respective February 1st highs for a push down. Should volume come in to the downside, we can see a deeper correction of the weekly uptrend over the next few weeks.
Be sure to join us for the free webinar on trading psychology later this month. You can see what it is all about here:
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