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The ‘inflating parabolic bubbles’ for the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite reached their all-time intraday highs of 26,616.71, 2,872.87 and 7,505.77 on Friday, Jan. 26, as the ‘melt-up’ to these closes warned of potential market peaks. Dow Transports and Russell 2000 were laggards setting their highs of 11,423.92 on Jan. 16 and 1,615.52 on Jan. 24, respectively.
The correction ended two weeks later, on Feb. 9, when the S&P 500 tested its 200-day simple moving average of 2,539.27 . At the lows, the major averages traded at 23,360.29 for the Dow, down 12.2%; 2,532.69 for the S&P 500, down 11.8%; 6,630.67 for the Nasdaq Composite, down 11.7%; 9,806.79 for the Dow Transports, down 14.2% and 1,436.43 for the Russell 2000, down 11.1%.
Here’s Today’s Scorecard
The weekly chart for the Dow is neutral with the average above its five-week modified moving average of 25,119. The 12x3x3 weekly slow stochastic reading declined to 72.97 last week, down from 84.44 on Feb. 9 and down from 94.49 on Feb. 2. The average is no longer overbought and no longer an ‘inflating parabolic bubble.’
The Dow Jones Industrial Average is above my semiannual value level of 23,018, with my annual and quarterly pivots of 24,666 and 24,251, respectively, and my weekly and monthly risky levels at 26,059 and 26,161, respectively.
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The weekly chart for the S&P 500 is neutral with the average above its five-week modified moving average of 2,722.60. The 12x3x3 weekly slow stochastic reading declined to 72.55 last week, down from 83.98 last week and down from 94.24 on Feb. 2. The average is no longer overbought and no longer an ‘inflating parabolic bubble.’
The S&P 500 is above my semiannual and quarterly pivots of 2,648.4 and 2,671.5, respectively, and below my annual and monthly pivots of 2,769.1 and 2,794.6, respectively. This week’s risky level is 2,812.7.
The weekly chart for the Nasdaq Composite is neutral with the average above its five-week modified moving average of 7,128.29. The 12x3x3 weekly slow stochastic reading declined to 74.75 last week, down 84.48 on Feb. 9 and down from 94.01 on Feb. 2. The average is no longer overbought and no longer an ‘inflating parabolic bubble.’
The Nasdaq Composite is above my semiannual and quarterly pivots of 6,782 and 6,720 with my annual pivot of 6,928 and my monthly pivot of 7,300. This week’s risky level is 7,426.
The weekly chart for Dow Transports is negative with the average on its five-week modified moving average of 10,617. The 12x3x3 weekly stochastic reading declined to 69.35 last week, down from 79.32 on Feb. 9.
Dow transports is above my semiannual pivot of 10,435, and below my quarterly, monthly and annual pivots or risky levels at 10,796, 10,963 and 11,401, respectively.
The weekly chart for the Russell 2000 is neutral/negative with the average on its five-week modified moving average of 1,543.54. The 12x3x3 weekly slow stochastic reading declined to 68.03 last week, down from 78.60 on Feb. 9.
The Russell 2000 is below my weekly, quarterly, monthly and annual risky levels of 1,569.38, 1,583.64, 1,622.86 and 1,664.90, respectively. My semiannual pivot of 1,454.79 was a magnet at the Feb. 9 low.
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