The longstanding target at 318.30 was effectively fulfilled last week when DIA got within 0.70 points of it just ahead of Wednesday’s regular-session opening. Even so, the Dow ETF remained buoyant for the remainder of the week, finishing near the middle of the range. A lunge higher on Monday or Tuesday is not likely to get very far, but let’s stipulate that DIA must close above 318.30 for two consecutive days before we assume that bulls are still in charge. Otherwise, a rolldown is coming, possibly turning into a long-overdue avalanche. ______ UPDATE (Feb 23, 8:23 p.m.): The hoax that wouldn’t die, apparently. Since DIA hasn’t actually touched 318.30, let me suggest buying a few cheap, soon-to-expire puts if and when it does. Treat them as you would a scratch-off lottery ticket, since you won’t be getting much better odds. All you’ll be doing is satisfying a gambling jones for picking tops, but what’s so wrong with that? ______ UPDATE (Feb 24, 7:20 p.m.): The puts came to us for as little as 0.38-0.40, but I suggested blowing them out shortly thereafter when DIA fist-pumped its way past the 318.30 target. This implies more upside to at least 327.45 (60-minute, A= 261.41 on 10/30; B= 299.49 on 11/9). ______ UPDATE (Feb 25, 6:08 p.m.): Today’s dive failed to generate a bearish impulse leg on the intraday charts, but I wouldn’t count on relative strength in the Dow to save the day for other broad indexes that fared worse. Key support lies just below 300.
DIA – Dow Industrials ETF (Last:314.02)