DOW JONES INDUSTRIAL AVERAGE

Above is the chart of dow jones industrial average, today(9th may 2014) we see a perfect textbook shooting star on dow jones. One might argue that we are so near to an all time high so the markets are highly bullish right now, i agree but this market is very smart in order to make money in markets you have a to be even smarter.  Every technician knows RSI(30-70) rule but very few know about RSI range-shift(60-40). I looking at the same chart that the world is seeing that even though we are so near to an all time high but the RSI(momentum) is not supporting it.Let me give you an example when we need to take a u-turn while driving the first thing we do is reduce our speed and then we take a u-turn;consider a uturn as trend change in markets(we are in a bull run since 4 years now) and consider speed as momentum(RSI).Even though the markets near their highs but the  RSI is failing to make new highs that means smart money is actually selling.

Text books tell us when RSI reaches 70 it is perfect time to sell but hello if it was so simple then everyone would make money in stockmarkets.This is a very clear distribution sign. Its just a tentative idea but i feel from tomorrow or from monday we will start the downward journey in worldwide stocks.Everyone knows that froth has been built into us stocks they are waiting for RSI to reach 70 then they will sell but i feel markets will outsmart them this time around. Markets fall when everyone on the street is bullish(from a barber to a portfolio manager) and we blame the markets that its a gamble but markets always warns you in advance what is going to happen. I am expecting Dow Jones index to crack big time(i am personally short in NIFTY though).

let me share an interesting observation with you all Russell 2000 is trading below its 200 dma and Dow is very close to its at all time highs.So one would think short russell and long dow but one would be absolutely wrong in doing so.In the past decade this observation has been only seen 2 times previously in 2000(dot com bubble) and 2007-08(sub prime mortgage crisis).This is the third time that this is happening i would be extremely cautious and advise people to be the same as well as a dollar saved is a dollar earned.

This bubble is a man made bubble created by global central banks namely FED, ECB and BOJ by pumping in excess liquidity in the markets and keeping the interest rates at an all time low.
This bubble will burst eventually but the reasons would be blamed on geo political crisis around the globe or even for that matter on the climate change whereas the actual reason is the EXTRA ORDINARY MONETARY POLICY by the major global central banks.No one would ever take responsibility for this though(i.e. FED,BOJ,ECB).

All i know is this downfall in worldwide equity markets will be so swift that we will hit a 10 year low in a matter of say 6 months and to me it seems that it has started from today.  I wont be suprised to see circuit limits being hit on a few equity indices worldwide. i have some data that proves smart money has started to buy ITM Puts for the month of may(talking about the s&p). One will be a fool in this kind of an environment to be a bull in these markets. If you cant take short position then please park your money in your savings bank account.

MY TARGET FOR DOW JONES IS 6000.If that hits or not is a different thing but my charts are suggesting that(read my post on global financial crisis).