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WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 5, 2020

January 5th, 2020

craps front coverSTOCK MARKET STRATEGY FOR JANUARY 5, 2020: The major indices in the stock market (Dow, S&P, Nasdaq) all hit historic highs on January 2, 2020. Given the current geopolitical backdrop, that day could prove to be the classic “internal high” according to the late stock market technician, Joseph E. Granville. What typically follows is a broad decline and then a retest of the January 2nd highs. In theory, the DJIA would close at a new high (“external high”) that is not confirmed by the majority of other indicators and indices. The time frame was usually 2-5 weeks in the previous era of stock market trading history.

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: The stock market may be forming a classic “Joe Granville Top.” This formation takes about 2-5 weeks to form and will give longs one last chance to exit the market before the next significant decline begins. Of course, this is theory but history has a funny way to repeating itself for those who are unaware or unbalanced in their thinking towards technical analysis.

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