The Dow Jones Industrials (INDU, DJI or DJIA), the most-watched index by John and Jane Q Public, prints a new all-time high at 12517.58 and new all-time closing high at 27462.11 on Monday, 11/4/19 overtaking the prior July record highs (neon green boxes). The Dow joins the SPX and Nazzy indexes with new record highs but the Russell 2000 small caps continue to lag.
Price is moving up into the red rising wedge a bearish pattern. The stochastics are overbot agreeable to a pullback. The red lines show universal negative divergence across all indicators although there is some near-term momentum strength in the RSI and MACD which could create a couple days of sideways choppiness at these elevated levels.
Yesterday's candlestick is a pseudo-shooting star. You want to see the upper shadow about twice as long as the body, but, considering that the SPX did print a shooting star (see previous chart and technical analysis), we will call it a shooting star, which is a bearish reversal signal. The COMPQ and NDX Nazzy indexes both print doji candlesticks which also typically signal a trend change.
The Dow tags its upper standard deviation band so the middle band, also the 20-day MA, at 26893, and rising, is on the table. For the new record high, the trading volume is unimpressive. The uber low CPC and CPCE put/call ratios signal rampant complacency in the stock market so a top and selloff is expected. Remember, the collapses from rising wedges can be quite dramatic.
Note that the triple-top for the Dow (July top, September top and current top) remains in play. if price retreats from here, a triple-top would have printed. The ole Wall Street adage says triple-top's do not exist. If you were thinking of selling any stocks, by all means, throw them overboard now without hesitation and bring on some shorts. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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