The S&P 500 ($INX) extended its a major (long-term) uptrend to a high of 5,767.37 before closing at 5,762.48, up 114.08 for the month. Theoretical Positions: Long from the October 2022 close of 3,871.98. Sell stops could be place below the previous 4-month low of 5,119.56 (August 2024). A 20% retracement is near 4,614. Recall the old definition of a “bear market” is a retracement of 20% or more.
The Dow Jones Industrial Average ($DOWI) extended its major uptrend to a high of 42,628.32 before closing at 42,330.15. Theoretical Positions: Long from at least the October 2022 settlement of 32,732.95 if not the breakout of the September high at 32,504.04. Sell stops could be placed below the previous 4-month low of 38,247.22 (June 2024). The 20% retracement level is near 34,103.
The Nasdaq ($NASX) still looks to be in a major downtrend based on the completion of a bearish spike reversal during July 2024. Theoretical Positions: Longs from the October 2022 close of 10,988.15 would have been liquidated near the July close of 17,599.40, locking in a gain of roughly 6,611. If new short positions were established, buy stops would be placed above the July high of 18,670.81.
The US 10-year T-note (ZN) remains in a major uptrend with the April Wave 2 low of 107-040 a test of the downside target of 107-016. The latter is the 78.6% retracement level of the Wave 1 rally from 105-105 (October 2023) through the high of 113-120 (December 2023). Wave 3 was confirmed by the August move beyond the Wave 1 peak, The initial major upside target is 118-273, the 38.2% retracement level of the previous major downtrend. Theoretical Positions: New longs might’ve been established near the November 2023 close of 109-150. Additional positions could’ve been established near the April close of 107-140. Another round of long positions could’ve been put in place during August as the ZN took out its Wave 1 high. This would put the average long position near 110-000.
