Saturday, July 19, 2008

$INDU Update for 07.19.2008


Monthly chart shows buyers showing up off the 11,000 level. While the index opened up higher in the beginning of the month, selling pressure saw a sharp move lower to test the 11,000 area, where aggressive buyers stepped back into the market. Is this nothing more than a bear market rally? This is a possible wave 4 consolidation/trading range before the next push lower. For now, the current resistance is right above at the 11,600 to 11,750 area. No confirmed buy signal/pattern off this timeframe for now.

Weekly chart shows that the first downside target at the 1.27 fib level has been hit. A bullish engulfing candle pattern was completed by this week's trading action. This indicates that in the short term, there were buyers off the 11,000 level.

Daily chart shows the strength of the buyers in the short term. Price is currently above the 8ema, but the the moving average ribbons have not crossed as of yet. The low made this week was made on regular divergence. Look for a higher low to be made to confirm a real change in trend. IF we can't seem to get much traction, and remain in consolidation, THEN that would be a clue that it is wave 4, with wave 5 lower low still to come.

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