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Preface to this post: Due to a fairly busy schedule on Friday, I am composing this prior to the opening bell. Thus, the charts are accurate through end-of-day Thursday, but the general points remain the same.
Here is the daily chart of the Dow Composite for the past couple of years. There was a pronounced gap (as with most markets) last week which was sealed during Thursday’s mega-rally.
I seriously didn’t think I’d have to do one of these “hey, when does this torture stop??” posts after the CPI came out today, yet here I am. Anyway, I’d like to suggest that this gap level on AAPL represents an important marker for when this senseless buying exhausts itself.
Yesterday I did a premium post called Golden Gap, in which I wrote:
Over the past six trading days, precious metals have managed to mount a hearty recovery, thanks to the (long-awaited) break in the US dollar’s relentless climb. I would like to suggest, however, that gold – – which has done an excellent job of disappointing precious metals fans for the past seven months solid – – may be reaching an important resistance point in the form of that island reversal gap. In other words, I think this might be just about “it” for now.
In spite of Monday’s big ol’ honking rally (which I publicly wished for over the weekend), some very interesting slow-motion meltdown is taking place out there, folks. The Dow Industrials Average has quite clearly broken the trendline established two and a half years ago at the Covid low:
Not to bury you in gap-based shorting ideas, but I present to you the Consumer Discretionary ETF:
