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Tuesday, April 28, 2009

All Eyes on the DOW

The DOW is of course what Middle America and everyone else quotes, tracks and pays attention to. It does not look particularly bearish. It is very much in a contracting pattern beneath a key Primary wave 1 bear trendline.
I have discussed many times the theme of Primary wave 2 wanting to breakout of these bearish P1 trendlines. This would be the last major index to do so.
It could pull back some more first to 7825 or so to complete a clean contracting triangle pattern before a big break above the trendline, but it certainly doesn't have to. I have showed you a pattern on the SPX that supports a big move to 881 and the NASDAQ is still in bullish shape (the QQQQ's are within striking distance of its 200DMA) running ahead of the pack so the other indexes support a move up.
I guess you could say the path of least resistance is actually higher not lower.

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