DOW JONES SHORT: Monthly Divergence, Fed HikeThe Dow reached as low as 17905 earlier in the day, but has since recovered somewhat to 18150.
Technically: The Dow is due for a large correction to the downside. There is strong divergence on the monthly chart towards 18500. The target would be the missed monthly pivot at 16300.
Fundamentally: US stocks are due for a correction to the downside, because the Fed will hike at least once this year. If they do not hike in September, this will be an opportunity to add to short positions through the election.
I am short on the Dow from 18500, and added on the pullback to 18150. This index should reach 16300 given enough time, as the Fed has to hike sooner rather than later if it wants its credibility to remain intact.
