DIA shredded its way past a major Hidden Pivot resistance at 327.40 that came from the weekly chart, implying that still-higher prices are coming. The overshoot was just five points, or about 1.6%, but that’s enough to presume that the next downswing, unless it exceeds 298.59 (!), will be merely corrective. Thereafter, we should expect any subsequent upthrust to achieve a minimum 343.38, equivalent to a 1700-point rally in the Dow Industrials. For trading purposes, use a pullback to p2=319.81, the secondary pivot, to get ‘mechanically’ long, stop 311.95. If you employ call options, I’d recommended targeting 343.38 with a four-week (or so) call butterfly. _______ UPDATE (Mar 23, 6:09 p.m. ET): Lower the bid to 296.24, stop 280.52, for now. Just a gut feeling that we needn’t rush to buy. _______ UPDATE (Mar 25, 6:45): I doubt that today’s surge is going anywhere, but if it exceeds the red line at 327.98 shown in this chart, I’d have to reconsider, since that would put a 335.04 target in play.
DIA – Dow Industrials ETF (Last:326.15)