Jul
Watching the DOW
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Can the Dow give us an indication on market direction? The index has moved back to a resistance level worth watching short term. 10,365 is the level to watch in conjunction with the 200 day moving average. As the chart below shows the pink line is the June high, the blue line is the 200 day, and the green trendline is in play as well.
There is plenty happeing is such a small range if the index can break up and above this congestion the upside towards the 10,900 mark could be clear sailing. It doesn’t sound like much, but it would be positive for the broad markets overall and invite buyers back to the table.
Volume at the bottom of the chart remains weak, but could move above the average line if the breakout takes place. Watch as an indicator of strength on the move. The reversal would take out the short term downtrend line started in April. The reversal would have to find some solid strength to the upside to challenge the April high. The January high at 10,723 would by my expectations on the break through this resistance/congestion. DIA, DIAMONDS Trust Series ETF is a simple way to invest in the Dow Jones Industrial Average.
As with any opportunity to put your money at risk measure twice before you play. Risk management is money management!
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