As we have warned, a near-term correction was due with the first opportunity for a low in February. January did just barely exceed the December high intraday, but not on a closing basis on the Dow and SP500, This raises some concern technically. Exceeding the December high even by a fraction intraday warns we do have a serious outside-reversal to the downside potential if the SP500 closes below 176799 at month end 15665.08 on the Dow. This would warn that a sharp drop is likely into February where we could see a retest of the 1680.00 level on the Cash SP500 15365.00 on the Dow.
The same construction of the Breakout Channel on the Dow Jones Industrials gives a different perspective. Here the market has still not broken out. It remains contained within the channel and this illustrates the difference between the HOT MONEY and the BIG MONEY. The Dow is still the leader to watch. Here, the turning point is the next week so caution is required. Again, no Weekly Bearish Reversals have been elected, but a weekly closing BELOW the December low will warn of a technical sell-off ahead.
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