Thursday, April 29, 2010

It Doesn't Make Sense

This rally doesn't make any sense, but who say the market has to be sensible. As long as there is a high level of skepticism on this rally, the market will continue to move higher. Look at the DJT, it made another new closing high. The tech heavy Nasdaq 100 also made a new closing high today. And look at these indices price patterns; these are not the pattern one would find at the top. These are more of the continuation pattern, so expect further high to come. The new closing high from the DJT is telling us the DJIA will make a newer high, so 'buy the dip' is the strategy to trade with.

Here are the updated charts, click on them to get a larger view and to read the commentary embedded in these charts.

DJT:



Nasdaq 100:



DJIA:



SP500:



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Thursday, April 15, 2010

Here's When It Got Started ... SP500 1250

The market is telling us higher high is yet to come and the inverted head & shoulder measure move target will be hit. Therefore, look for the DJI to reach the 11500 level, and the SP500 to reach the 1250 level. Here are the links for the post where the inverted head & shoulder move was put on the alert: the beginning, the reminder.


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Sunday, April 11, 2010

Not ‘If’ But ‘When’

During the last few minutes of trading on Friday, the DJI moved fractionally above the 11,000 mark for a brief moment, not long enough for one to count to ten. At the close, the DJI ended at less than 3 points shy of 11,000. I believe this is fortunate for the bulls and unfortunate for the bears. If the DJI have closed fractionally above the 11,000 level, this will only give the bears courage to pound on the market come next Monday since the DJI would have breached the 11,000 without momentum and without a catalyst. Whenever a technical or psychological level has been breached, it must have a catalyst accompanied with momentum in order to be relevant or it is just a head fake.

Will the DJI move above 11,000? The answer is a resounding ‘yes.' It is not a matter of ‘if’ but a matter of ‘when’ the DJI will cross the 11,000 mark. By looking at the DJT’s performance, it clearly indicates the DJI will move above the 11,000 level. Today the DJT closed at another closing high, and this time the DJI also closed with a new closing high. Based on the Dow Theory, the DJI will not terminate its advance until a non-confirming closing high has been made. Therefore, with less than 3 points away from the 11,000, it is inevitable the DJI will crossover the 11,000 before this rally end.

I will be watching the market closely next week as first quarter earnings reports start to flow. The market will likely attach itself with the positive earnings reports and use them as a catalyst to propel the DJI above 11,000. How high will it go? We won’t know until it gets there, but keep watching. The market will give us the signs just as it is giving us signs that the DJI will see higher high.

Check out the charts...

DJI:



DJT:



SPX:



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Thursday, April 8, 2010

One More Time

The Dow Jones Transportation index is tipping its hat one more time to tell us the Dow Jones Industrial will make a new closing high. Can this new closing high be above the elusive 11,000 that everyone bulls and bears been waiting for? We’ll see.

The DJT closed at a new closing high today while the DJI only made up a small amount of its recent loss. Similarly for the SP500, it also is struggling to move toward the 1200 level.

The DJI and the SP500 index are showing signs of weakness. But the market is still locked in a game of cat and mouse. The bears have been burned numerous times recently by the dip buyers, and the bulls have been beaten back whenever the DJI appears to get close to the 11,000 level. These market actions have made it very frustrating and agonizing for the bulls and the bears. Having the DJT closed at another new high without the confirmation from DJI lend further signs that this cat and mouse game will continue until a new non-confirmed high from the DJI is made. Until DJI breached a major milestone, such as DJI break above 11,000, the least resistance for the DJI is up. Near term support for DJI is 10,800, and 1175/1160 for the SP500. Upside for the DJI is 11,000 and 1200 for SP500.

Here are the charts for DJI, DJT and SP500.

DJI:



DJT:



SP500:



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