Market Outlook

The Nasdaq which has led since the beginning of the year continues to do so while the Dow Jones has gotten weaker and weaker as can be seen on a daily chart. This same scenario happens to be a replica from the past when in 2000 the Nasdaq kept forging
ahead while the Dow kept weakening. It eventually played out with the Nasdaq dropping 85% in the following 3 years. When the Market hit the March 6 bottom we predicted a rally greater then any one that had taken place in recent history which has indeed occurred BUT we are now at a point where the Banking and Finance stocks have not exceeded previous highs.
The question now becomes do we make new highs in the Nasdaq followed with further divergence in the Dow and S&P before we sell off?
Certainly going below 870 for the S&P and 8100 for the Dow puts the Bears back in the drivers seat and from that point would not take much to eventually break through the March lows but for now the next step to follow is whether those highs will be broken.

TRADE IDEA::
Shorting the market in the window of 938 to 945 with a stop at 960 was worth the risk for those with high risk tolerance. Any drop below 888 is now confirmation of lower lows towards the 840 area