Hi everyone, welcome! Let’s look at some weekly charts of the indexes.
Below is the Dow Jones (DIA) on the weekly chart.
Although we have made new highs and look to gap up, this represents a good shorting opportunity since we have a relatively large weekly RSI divergence. The index has made new highs but the RSI has not followed – suggesting weakening momentum. Because of this, I suspect DIA retests the 245-250 zone (the rectangle in the chart above) in the next few weeks.
QQQ is far weaker than DIA since it didn’t even make a new high. I suspect the indexes drop together – with QQQ retesting the high 160s to low 170s in the upcoming weeks.