YW & best of luck on the trade. I also think once the dam breaks there is likely to be a very swift move down & the most likely catalyst, assuming that is what is going to happen, could be NVDA earnings next week.

A break of last Friday’s lows also has the potential to spark an impulsive wave of selling but again, the market is likely to only drop “so much” until NVDA is out of the way although it wouldn’t surprise me to see QQQ drop down to T5 on my 15m chart before then, which would be a 5 1/2% drop from where /NQ triggered that short entry I posted yesterday on the 60m bearish rising wedge breakdown.

Thank you for this info as I have taken a starter short with the up move over the past few days as it looks like almost a vix type hedge to me for when the dam breaks it will fall fast.

As far as a short on DIA (DJIA ETF), I don’t see any sell signals or solid reason to be short, although I believe that IF the recent sell signals on both QQQ & SOXX stick AND play out for considerably more downside, as I suspect, then yes, the Dow will get dragged down with it, kicking & screaming. All the better if & when XLF (financial sector ETF) triggers a sell signal on a solid break below the 51ish price support & intersecting 200-day MA’s , which currently lie just over 4% below current levels on XLF.

The DJIA is a PRICE*-weighted (*edited from cap to price-weighted, for correction) index with the largest component (by a good margin) being GS, at a weighting of 10.40-10.63% (depending on the sources I just checked). So again, out of 30 stocks, the largest accounts for over 10% of the returns instead of just 3.33% (1/30th).

GS has ripped up 10% since its lows on Friday (less than 4 trading sessions, as today is still young), hence the outperformance of the DJIA.

Randy
I have noticed that the dow has the last 2 days been very strong compared to other markets , can you comment on this unususual occurance and your thoughts of why and your ideas of a short play on it please?