Seven years ago the DOW was trading around 6000, today this index is over 17,000. So what is the next big move in this index? I suspect the next big move will be on the downside. Today, China announced that exports hit a 7-year low which indicates to this observer that economies around the world are slowing down. Technically in many of the major stocks we still have red monthly Trade Triangles indicating that the trend is still down longer-term. The same holds true for the major indices where we are still seeing monthly red Trade Triangles. At the end of last week, I indicated that I expected this week to be choppy and range bound, as the major indices have all reached major Fibonacci resistance points. I expect the indices to turn back down after a week or two. I still hold to that belief and want to watch these markets very carefully looking for an entry point to go short.
StocksHere are some of the well-known stocks that I am looking at to go short: Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL), TESLA (NASDAQ:TSLA), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Under Armour (NYSE:UA), and Yahoo (NASDAQ:YHOO). There are additional stocks I will be looking at, but the stocks listed above all have red monthly Trade Triangles. The Trade Triangles are indicating a sidelines position in these stocks, waiting for a weekly red Trade Triangle to kick in.
GoldToday gold flashed a red daily Trade Triangle indicating a move to the sidelines. This trade produced a $31 profit. The Trade Triangles signaled in at $1,223.99 and out at $1,254.67 (See chart for confirmation). I am going to remain on the sidelines and wait for a green daily Trade Triangle to give us a buy signal. I am also going to be watching for support to come in around the 50 line on the RSI indicator.
Crude OilThe Trade Triangles are long crude oil and I believe we have seen a bottom for the time being in this market. I would not be surprised to see a pullback to the $34 area as this market consolidates its recent gains. I am expecting this market to trade up to the $39-$40 level in the not too distant future. For the moment, hold onto long positions with tight money management stops.
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