Although the Stock Indices remain a bit positive technically, it has just fulfilled the potential for a blow-off rally as stated in my previous article dated 20/5. Normally, after blow-off, the indices will immediately decline sharply. Today, the Nikkei’s 1200 points (7.3% dive) plunge fulfilled my prediction of this blow-off top. Look at plummeting Nikkei’s chart below:
The Dow has been up 19 Tuesdays in a row. That's incredible. Last night, the Dow also experienced some sorts of blow-off top that rallied up 120 points to peak of 15438 (using CFD) within 30 mins. However, half an hour before the market closed, the Dow immediately plunged from positive to negative with a hellish drop of almost 200 points.
I do not have much idea why ‘blow-off’ has to happen, but I can tell you that this ‘blow-off top’ is expected and calculated according to my Gann’s analysis of 180 degrees turn (though a bit extended).
My subscribers know that I got them to ‘short’ the Dow last night near to the peak of 15500-15550. They are all now ahead with a very good ‘profits’.
How do I get that ‘peak point’? I use another method called “Lindsay’s ABCD’ to pin-point the possible top. As I am writing, (4.59pm Syd’s time), the Dow future is sliding fast down with another 100 points, which is raising the possibility of helping all my subscribers make substantial profits tonight if they choose to close the position. For information, we also make some profits in Long USD and gold trade.
As some of you may know, The Dow Transports is one of the leading indicators to detect the direction of the market. It was down 107 last night while holding Monday' record high of 6568.41. But in a technical sense, the Dow Transports is showing a negative divergence (it did not create new high in the last 2 sessions) and thus provide a bearish picture of the Dow in the short term direction. It is time to play ‘cautious’.
Before I pen off, I want to tell you that we often get market reversals ahead of long U.S. holiday weekends. Will we get the same outcome this weekend? I hope so because we have already entered the ‘short positions’ with handsome profits. In any case, we have already locked in some profits and protect our capitals and therefore any rebound won’t bother us. You never go broke by taking profits. There is a time to buy and a time to short!