Index momentum turns down

The daily Dow is pushing up here trying to go for a record close. At the moment it looks like a three drives to a high pattern. It’s bouncing off the long term standard error band, and the trend indicator is up (I’ll be explaining the indicators soon in the indicators section of this site) and momentum is positive at the moment. However if this third attempt up fails there could be a nasty selloff. But that’s my bias getting in the way of what the chart is saying.

The Nasdaq 100 as represented by the QQQQ ETF is in a much stronger position. It previously had three or more pushes to the upside but the upper side of the rising error band held and it pushed up to new recent highs. There is a rolling over of the CCI (middle indicator) with a slight divergence and the cycle (bottom indicator) is very overbought. Also prices didn’t make any progress from the open. We could get a pullback within the context of a larger cycle uptrend. I would look to short for a quick scalp and then re-enter on the long side when and if the cycle turns back up from a lower level.

Gold had three pushes down with CCI divergences and is now making an attempt back up. It is stalled for now on the lower, declining error band. The CCI has made a nice hook around the zero line so it might try to rally more from here. The short term trend is still down so would stand on sidelines until this bouce plays itself out.

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