I love the smell of fresh weekly Japanese candlesticks in the morning.
Especially this one, right now…
The Dow Jones Industrial Average:
Here’s what I’m watching specifically. The low this week was the exact high from the prior cycle.
Do you think this is a coincidence?
I certainly don’t…
This is exactly why I talk about the principle of polarity so much.
It’s such a simple yet powerful concept to remember…
Former resistance, once broken, becomes support.
And former support, once broken, becomes resistance.
If you recall, Papa Dow peaked in late 2021, early 2022.
So did the S&P 500…
And the Nasdaq 100…
And the Russell 2000…
It was a major peak for risk assets globally.
The way I learned it from a mentor of mine, Ralph Acampora (co-founder of the Chartered Market Technicians Association), is, “Don’t fight Papa Dow.”
Decades later, I can still hear him uttering that phrase to me…
“Don’t fight Papa Dow, JC!”
I will never forget that phrase…
It just so happens that in this case, by not fighting the Dow, we’re also not fighting the S&P 500 or the Nasdaq 100.
That’s not always the case. But it definitely is this time!
If these indexes, the Dow in particular, are above the late 2021, early 2022 highs, then this bull market is still intact.
That means we want to be spending our time looking for stocks to buy.
NOT looking for stocks to sell…
That’s the bottom line.
This Week in Everybody’s Wrong
Friday morning, we took another look at the chart that defines this bull market.
It looked good before the opening bell. And it looked great by the closing bell.
On Monday, we talked about the way to do that: Buy relative strength. Bitcoin (BTC) is holding up relative to other assets.
Here’s why we’re buying on the way back up.
On Tuesday, it was obvious that everybody was losing their minds. The CBOE Volatility Index – the VIX, or what the journalists love to call the “fear gauge” – spiked to 65.
Historically, investors have been rewarded for buying stocks when there’s blood in the streets. Not punished…
Here’s why we’ve been looking for big rallies.
On Wednesday, I highlighted the chart that defines the bull market. We’ve witnessed historic polarity in real time.
On Thursday, Goldman Sachs called and un-called the shortest recession ever. Folks, nobody knows anything.
Price is the ultimate arbiter of truth. That’s why our focus is and always will be on price.
Here’s why I’m excited when old resistance becomes new support.
I didn’t know stocks would end up one of the most volatile weeks in history in positive territory.
We’ve seen some of the biggest moves ever over the last five days. And my favorite level held up throughout.
Folks, let’s keep it simple and let the charts guide our investing journey.
I’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs