$DJI ~ Double Top

Thanks for sharing! I think a lot of us are watching the double top formation to see if it confirms what we already know – that the market has been overdone for a while and is primed for a pull back. That said the market is always right and has been climbing for weeks without any evidence to support the move. What’s the old adage “the market can stay irrational longer than you can stay solvent”? A failed double top can be a very strong pattern if you do not see follow through on heavy volume pushing significantly through the neckline to confirm. Even then the pattern is not confirmed until you have a throwback rally that holds the neckline area as resistance before continuing down. A failed H/S is even more significant if you ever see one. Just be aware.

My personal two cents is that we would want to see a push lower toward a test of the BBB / 50MA area of the Daily that takes out the pivot high around 5/12 and pivot low around 6/9 thus creating a new pivot low for those that follow price action. A bounce from that area up to around the neckline area that holds and turns over would be best case scenario to confirm a new downward trend (and a new lower pivot high). I do have a slight bias to the down side but try to remain market neutral and aware that other possibilities do exist.

NCT

Thanks NCTrader ,
I got what you explained , but are you with me that the market is becoming weaker and weaker preparing to fall !!

Shhhhhh.... Don't say that out loud! I'm in a Call play at the moment :-) I don't want the Markets to hear you. Hehehe.

The market is starting to feel invincible to the upside, time to be fearful....or maybe this time is different!!

Everyone keeps telling me the market is going to crash.Does this mean it is time to buy again lol?

In my experience over past few years, betting up has always been prudent. I noticed Dow weekly got support on 8 ma. Will it hold? You can't really predict such things. Seems like if everyone is on side bull or bear then it doesn't work out.

Yes, I do think the market is starting to get a bit weaker from a technical perspective and I am personally seeing some short term (a day, two or three) put positions paying off whereas I was having trouble with puts a few weeks back. The past few days the bulls have certainly stepped up midday to show that they have not given up. Price action on major indexes still making higher pivot highs and lows although slowing down. Also heading into EOM/FOM which could mean speculative cash inflows. I am not the best to argue seasonal patterns but I believe there are some tech companies that like to rally from around the 4th until midmonth. I am open to working both sides but taking profits relatively quickly and looking for any reason to leave. This is the time of year that gets a bit frustrating for me as a bigger chart trader as I occasionally have to drop down to shorter timeframes than I typically use.

Good luck to all and Happy Trading!

NCT