Market Update

The DOW is now about 170 points away from its May high and 250 points away from its all-time high. On a very good day, to achieve 250 points is not a problem for DOW. The S&P 500 index had already broke its May high.

However, the market had shown a lot of lethargy, trying to break new high. It is in overbought situation. It had 2 down days for the past 2 trading days. While the market will probably make another attempt to break an all time high for the DOW, it is time to consider that the market might be in for a pull-back. There are many stocks as candidates to short, especially the Tech stocks (many with confirmation candles). The stop-loss should be the recent high.

A few things to consider however:

• Jim Cramer had been calling to dump energy stocks and push for Tech stocks (at least till the end of the month) as he believe that the institutional investors will window dress this quarter with Tech stocks.
• He also mentioned that crude oil will drop to $56 before it go up again.
• Many analysts are still expecting a Christmas rally. Such expectations tend to be a self-fulfilling prophecy.
• September tends to end lower.

While I tend to give what Jim Cramer says with a pinch of salt, what he says tends to move the market in the short-term. As a swing trader, I play on a short-term basis. As such, I have to take notice of what he says eventhough I may disagree with him.

- PersianCat04 (Millionaire-in-progress)