The bulls were very stubborn today and were determined to push the Dow to a new all-time high. That feat was accomplished on an intraday basis but the index closed below the old high once again. Still, I didn’t really like the action today. The A/D line on the Nasdaq was slightly negative at about 7:8 and the NYSE’s was barely positive at 17:16. Another negative was pointed out to me in an email I which I received at 4:04 today:

What’s your take on this record setting dow day as the ratio of up volume to down volume at each exchange was so poor? nyse: 7:9, naz: 8:10, amex: 1:3. Appears the headlines wont be telling the whole story.

My response was that, like I’ve been saying the past couple of days, the small and mid-caps aren’t participating in the fun. I have no idea why the whole world is so fascinated with 30 stocks (the Dow) when there are thousands of others that tell you the real story of what’s going on in the markets. Oh well, I guess that’s why I’m not on CNBC — I don’t believe the hype.

I guess I should feel lucky to have escaped with a nice little gain today from nothing but shorts. DGX turned out to be my big winner for the day, although it should have been much bigger. As you can see on the daily chart, it had a nice gap to fill right a the psychologically important $50 mark.

Even though I knew (I thought I knew) that it was headed for $50, the market action persuaded me to exit earlier than I had originally planned. I entered at 10:41, right after it broke under $54. The entry was a little early because it was still above the low of the previous candle. But I took it because I really like to short under whole numbers, which are typically resistance. So I thought I’d roll the dice on the entry and get a tighter stop and thus be able to short more shares. I covered half just after noon at $52.40 as the indices started to follow through on their earlier strength. I planned on holding the rest until the close with a loose trailing stop but I got antsy and covered the rest at $51.71 at 2:10, just minutes before it tanked and hit $49.90.

On the bright side, I also covered my other three shorts (CNO, SEPR and ENDP), which weren’t working, just after noon and that saved me some money because all three would have hit their initial stops. So I ended up making 2.78R (2.09%) on the day thanks to the 3.78R (2.84%) gain in DGX.

I took advantage if the clues from $TICK in deciding to bail on the shorts at noon. It kept spiking over 1,000 and that convinced me to bail, despite some other bearish signs I saw, like my moving averages and the A/D line.

Anyway, enough of that intraday minutia, here are charts of the Nasdaq, S&P 500 and Dow. As much as I want to be a short term bear this week, the indices appear to have completed normal retracements and seem ready to push higher. Of course, we could just chop around until Friday’s jobs report. Time will tell…

Trend Table

No changes…

Trend Nasdaq S&P 500 Russell 2000
Primary Lat Up Lat
Intermediate Up Up Up
Short-term Up Down(-) Down(-)

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend