Shorts panicked Friday afternoon, sending this ETF into a bullish spasm that tripped a theoretical short at 270.29. Since we don’t know how DaBoyz will open index futures Sunday night, there was little justification for bold action. If DIA were to gap higher Monday morning, following the lead of a rampant E-Mini Dow, a move exceeding not merely C=274.59, but the ‘external’ peak at 277.40 recorded two days earlier, would be warning bears not to get in the way aggressively. Alternatively, if the week begins with pronounced weakness, use p2=261.70 as a minimum downside target, and thence D=257.41. Both can be bottom-fished with as tight a stop-loss as you can abide. An rABC set-up on a chart of lesser degree will likely be the best way to do this. _______ UPDATE (Sep 29, 5:46 p.m. ET): Buyers chickened out just shy of the 277.40 peak noted above, but they appeared to be staging for a second try after dipping halfway into the gap created by Monday’s short-squeeze opening. If Mr. Market is as devious as we know him to be, he will pop DIA above the recent 277.12 peak and then pull out the rug. Here’s the chart. _______ UPDATE (Sep 30, 6:13 p.m.): Well, we had the breakout and the possible beginning of a big correction. Now let’s see what bears are made of.
DIA – Dow Industrials ETF (Last:277.47)