When warning signs flashing on the car dashboard....

I have been sending numerous indicators in the past few weeks that are flashing increasingly into the red zone but the market keeps going up regardless. This reminds me of what we often encounter for our car: the warning signs flash from time to time on the dashboard but the car can still drive for quite some time without any apparent issues. But experienced drivers certainly know that we cannot just ignore the warning signs and need to stop at some point to check it up. Otherwise we may run into some huge problem for the car or even a crash if some significant warning signs are ignored and the underlying problems are not fixed.  This is the same thing for the stock market. When the warning signs are showing up, it doesn't mean the market must stop going up or immediately go down. Not at all. It can continue to go up for sure for as long as it likes but eventually it will stop and correct. While no one knows the exact breaking point in advance, it is safe to say that the risk is increasingly higher when more and more warning signs are flashing. So let me add one more warning sign that is flashing wildly right now.   

NASI is a momentum indicator for NDX (Nasdaq 100). In a nutshell, it is telling how many underlying stocks are participating the trend when the index is going up or down. As we all know, tech stocks are red hot these days and is leading the whole market by making new highs again and again. But  what is really concerning is that, despite the continued strength in NDX, fewer stocks are participating in the rally. This was an early warning sign of an impending correction back in February. We're getting an even stronger warning today!

 Of course as I have said, it does not mean the market must come down immediately as the car can continue to drive ahead for a while. But be mindful of the potential risk, which could be quite significant or even lethal if not careful. 

Don't get me wrong. I'm not saying we can make some quick money from the super bull run that is even a bit nose-bleeding. At the DW Family, we have actually harvested a few doubles in the past week or two for some bullish trades, including the bullish trading for TQQQ. Even though I continue to be very cautious about the market right now and continue to think a sizable correction can happen any day by now, I don't mind doing some bullish trades as well per my TA analysis. The key is to be mindful of the potential risk and how to hedge it while being long, and must be also very nimble as well!😎 

Just so you know that the current relentless bullish moves have made the famed Mad Money really mad: 'I can't take how stupidly bullish this market can be',  Jim Cramer outcried lately. 😜

By the way, you must know by now that it is nearly a certainty that Wechat will be gone in the US. So very soon we have to communicate via other media. For DW investment group, we have set up a Telegram group. If you want to join,

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