Still Holding My Breath!

I don't know about the rest of you, but I spent the last 30 minutes of trading Thursday glued to my Stockchart screen, watching the 5 minute 2 day on 30 second refresh........needing to know what was going to happen at 1334.  It was like 30 minutes of foreplay, without the play.  (I had other metaphors but I thought better of using them. ;-)

So we still don't know what is going to happen at 1334 and now I have to hold my breath for 3 more days.  At the close, the Dow had made another recovery high, but did so all alone, with out the SPX, the DJT, the XLF, the Q's, the RUT or the NDX.  SO at least for the weekend, the Bears can be comforted by a Dow Theory non-confirmation.  And the Bulls can be comforted by the widely anticipated break out above the resistance lines and the inverted head and shoulders neck line.

The Momentum Change indicators for the DOW, the SPX, the Q's and the Trannies all generated a Buy signal 4/20 and 4/21.  The history of the Momentum Change signals has been very good, but I use them in context of the market outlook.  Just like I did not like the surprise Sell Signal earlier in April, feeling like if was setting up a whiplash, and I decided not to trade on it. Tthis new signal was several days in developing and I expected it.  But at the same time, there is significant resistance at the 1334 level, and while inverted head and shoulders patterns can be very powerful, they can also fail.

So I have elected to exercise a little patience and wait for the battle at 1334 to resolve.  If it breaks above, there is likely to be plenty of time to catch the up leg,  However, if it fails, there will be plenty of time to catch the next wave down.  In addition, my timing signals are looking for a top mid next week.  While the timing tools had little impact in the Fall and early Winter, I suspect due to the rivers of money printed by the Fed, they have been correct the past 2 months, and I want to respect the signal telling me that the market could be making a momentum top next week.

Have relaxing 3 day weekend, and we will get back into it on Monday.

Best To Your Trading.

Bill