New High on the DOW ... Now What?

The Dow jumped to new highs for the year, extending its gains from the lows seen in March.

What does this mean for the future?

The Dow is now within 100 points of being into thin air as it has retraced close to 50% of its down move. The NASDAQ has already done this, and the S&P 500 has come very close to achieving this goal. Clearly the trend continues to be positive for the Dow with today's new highs. The other two indices, while closing very well and on an upbeat note, must clear their previous highs to start another push to the upside. It remains to be seen whether or not that will take place.

Clearly this is an emotional market that's been driven more by sentiment than hard economic news.

Having said that, one must take into consideration the perception of the marketplace, and as of right now that perception continues to be friendly towards the long side of these markets.

In my new video I show you some of the key points to look at in terms of where these markets could potentially break down, and possibly reverse to the downside.

As always our videos are free to watch and there is no need to register. I hope you enjoy the video and comment about it on our blog.

All the best,

Adam Hewison
Co-creator, MarketClub

18 thoughts on “New High on the DOW ... Now What?

  1. Richard,

    Adam here. There was a negative divergence earlier on the DOW, but it looks to me that the MACD is coming from more of a positive mode. This of course could change in the days and weeks ahead.

    I did not mention the MACD in the video as the DOW was moving into new high recovery ground and the MACD was moving up in unison.

    I hope this answers your question.

    All the best,

    1. I agree with the posts here re: the MACD divergence on all of the indexes, lower MACD highs as index price levels have made new highs. This probably indicates the uptrend is losing momentum. This could indicate a sideways index price consolidation going forward as opposed to an immediate sell off, and may limit further upside to the indexes before things start rolling over.

      Could you comment further please, Adam? Thanks

  2. I'd like to know more about what Jo asked. When I watched the video I picked up on the MACD divergence (thanks for teaching me that tool) and was curious why you did not touch on it, Adam. Is there something different about this situation?

  3. Timely Post thanks Adam. There is definitely danger to the upside for those who are already short this market. In my opinion this only means greater profits on the short side when people finally realize that the economy faces years of low growth and high unemployment. One thing to look at is the Nikki Index which is Japan's stock market. This market has more or less capitulated already. Japan has already experienced what the West is going through so they are in no doubt about what lies ahead. Fool a man once and shame on you. Fool a man twice shame on him.

  4. How about the MACD divergence from the trend? It's just a matter of time and I don't believe it will be too much time, either.

    1. Any idea why Adam did not touch on this important observation? Is it somehow not appicable here? He's talked about divergences in the past and it seems odd he did not mention it -- I was staring at the divergence through the whole video.

  5. Someone correct me if I'm wrong, but I believe it's a matter of weightedness. CAT and IBM are among the few companies more heavily weighted on the DOW.

  6. Adam,

    Thanks again for another informative video.I appreciate the fact that you take challenging indexes,commodities and the like and give an honest insight on where we could go.Keep it up it's why I am a member of Marketclub.


  7. This is linked to my question who buys stocks.
    From a in depth analysis of the in parallel to DJIA rallying German DAX
    it is known: no one buys stocks since Mar 2009!
    Fact is : insurers and private pension funds sell stocks
    private investors keep on sideline
    banks sell more stocks than they buy
    insiders sell stocks

    so who buys stocks to feed the rally?

    Cannot be short squeeze and there is no known long squeeze...

    Somthing suspicious going on a super bull trap?

    Hans Dieter

  8. The market will continue the uptrend because the obama adm and the fed keep on providing more fuel to the fire in the form of spending, stimulus, printing, 0 interest rates and so on, when all these liquidity is drain out of the market you will see it fall. I see signs of inflation everywhere, in the food we eat, the companies that make it, but many are still in denial and covering their eyes and ears.

    I'm nervous about the market, because i can see what these idiots are doing to it, and my concern is the same, when the rubber band finally snaps the small investors will be left holding the bag as usual.

  9. Hello Adam,

    Curious with the S&P weekly "timing" indicator showing negative and yet the market continuing higher? I value and appreciate your comments?


    1. Dan,

      Thank you for your feedback. The exit signal on the weekly triangle on the S&P remains intact at this time. If, and that is a big if the S&P makes a new high then we will have a signal to resume a long position in this market.

      All the best,

  10. Hey Dave,

    New to your stuff but really like what I see.

    Just getting ready to crank back up the trading machine after a few years off.

    I don't think much has changed in the markets from when I left but I would like to ask a question.

    How did the DJIA gain 203 points yesterday when there were only 2 Dow Stocks (IBM, CAT) that were over $2.00? I added all the Dow stocks up and only came up with 27.85 points on the day.

    Am I missing something here?



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