Squawk Evening Update: New Highs Again

Today the DJIA joined other indices in new highs.  The turn upward after only three waves down was the first clue that it might continue on to new highs.  It looks as if the we haven’t yet put in five waves up into the highs; typically a sign that there is more up.  However, we also note that the high was just short of a FibGrid snow line and right at some important Fibonacci ratios.  Tomorrow morning in our briefing we’ll show an ending diagonal count that could explain a turn down from this level should it hold as a high.

Today provided a good example of why we’re so cautious about long-term positions.  There was a solid move down in the morning before new highs, but a close that was only up single digits from yesterday.  It would be nice if the market gave us a nice trend.  We continue to believe that the next significant trend will be down, but will wait to see it develop or evidence that it won’t.