If (and it's a BIG if) the Dow reverses course right now, that would be a clear sign to begin cashing out of long positions and start piling on the short positions on general equities. It would also be a sign that assets inversely related to stocks and bonds would make good investments.
Time will be the ultimate revealer, but I've now got one eye on the Dow Jones to see what happens.
One curiosity which we've seen before is that on a weekly basis, the Dow is weakening while the transports , have consistently strengthened. On a daily basis, however, both indexes have been consistently making new highs until now.
Be careful over the next few weeks, but don't be hasty in buying OR selling. I view this time as a holding period since the evidence is neither for or against a major market decline or rise. This makes the primary trend still UP. Don't forget that. I am holding because the primary trend remains up.
I am still biased to the upside, as I believe that the billions of dollars on Bank balance sheets will make their way into the stock market, propping it up even further. With bond yields still low, and most Dow components not far off of their 52-week highs, I don't see any reason (other than logic and the real world .. but both are being defied at the moment) for the Dow not to hit new highs. Everyone is still skeptical of the stock market, and that alone gives me good reason to believe we will see new all time highs soon.
R
