Technical Analysis on Dow Jones

I am keeping things simple and only looking at about 6 months down the road.

Here it is; Dow to hit 9,500 on the low or 11,150 on the high before End April 2009. Support is likely to be 9,500 to 9,800 while Resistance won’t get any higher than 11,150 to 11,500. That means a best case scenario is a sideway trend for the next 8 to 9 months. In a better case scenario, a volatile downtrend till April.

Check out the chart – click to expand, please.

dow01.jpg

First of all, we have a beautiful A to B to COP that’s holding firm (at the downside 61.8) at 11,720. At its potential highest, Dow will only get up to 11,820 in the very short term (see rising wedge – green1) up to the confluence of the downtrend channel resistance, COP and end of the wedge. Thereafter, I expect a major vomit.

But, the market being as dynamic as it is, there is a possibility, albeit a slim one, that Dow could break up like it did back in April (see yellow highlight). If it does, it’s rather obvious where the upside resistance will be. Watch the downside Fans (pink) for a hint of an early retreat.

With all things past, allow me to humbly remind all my readers that I have not been off the target on the Dow … yet. I did skew oil in the wrong direction (back in May) but we still have another two plus weeks to run before I’m wrong. But that’s oil.

Good luck!

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