507
. .
---------→ A look at the Daily Chart of the Dow date: 3/20/09
The Dow closed at 7078.38. It was down 122.42 points or -1.65%.
The Candlestick on Wednesday indicated some indecision with the long upper and longer lower shadow.
Thursday we were down and once again today.
We have a lower high and a lower low – a Bearish sign.
The Dow found resistance at the 40 MA set at 7504.
The Infamous November Low of 7552 proved to be too much resistance – for now.
We tested this level on Wednesday and was rejected when the Dow intraday high hit 7571.64.
The Dow tried again on Thursday to retest that resistance and was rejected at 7548.46. ------------------------------------------(By the way, how do you like my new toy?)
(On the chart above, the first horizontal line is resistance. The other horizontal lines are levels of support.)
We hit some major levels of resistance. First we have the diagonal downward trend line that the Dow has been following down.
We are also at a horizontal level of resistance extending out from the November lows and February 19th and again yesterday.
There was major resistance since these two resistance lines converged.
I am not surprised that we turned lower. If the Dow made it past these levels there would have been resistance at the upper Bollinger Band currently set at 7626.
Levels of support can be found at
7257
7220
6926
6870
6547
After that – 5400 and 5100
I think that we will retest the 6500 level, and maybe even trade in a channel for a period of time.
If you look at the price action for the day, we were bumping along the 7400 level until around noon, when Bernancke spoke. Then the market headed south.
RSI broke above the 50 line and now has turned back – Bearish
This level has proven to be resistance before.
CCI did a negative kiss on the 100 line and turned downward, another Bearish signal.
Stochastics, both the fast line and the slow lines, is oversold.
The Fast line has turned downward and crossed back through the slow line – Bearish.
We see that volume is down from the last two days. Still over 2 Billion per day
We see a sharp down tick on the Accumulation/Distribution, possible a double top.
We may find support for ACC/Dist from the level set on 3/16.
There some bullish signs, the 9 MA has crossed up through the 22 MA.
The MACD Historgram is above the 100 level at 103.58, although it did downtick from yesterday.
The MACD fast crossed up through the slow line on last week and is still going up. It seems that both the fast and slow lines are just starting to level off.
-------------------- The Weekly Chart of the Dow week ending 3/20/09 --------------------
The weekly Dow did close up at 7278.38. That was up 54.40 points or 0.75%. This makes the first two-week winning streak since January of 08!
Over the past ten weeks the Dow has been trading below the 9 MA. This week it tested this level and was rejected.
The candlestick is a gravestone doji. This can mark indecision or a reversal. This looks Bearish, since this came at a level of resistance -- the 9 MA.
RSI has flattened out at a level of resistance we have seen four other times since October.
CCI looks like it wants to be positive. It looks ready to cross the -100 line. If the CCI can cross up through the -100 line, that would be bullish.
It has crossed up through the -100 line twice since last July, only to be turned back well before the 0 line.
Stochastics looks Bullish. The fast line has crossed up through the slow line and we see the fast line has also crossed up through the 20 line. The slow line is upticking, as well.
Volume was very strong. Volume topped 13.5 billion for the week – Bullish.
This is the 4th week in a row that the volume is up over 10 billion. It is also the second straight week of positive volume.
Volume from Mid-september to the last week of February was up significantly when compared to the volume the previous 11 months.
The last four weeks the volume is up significantly when compared to the time from of September to February.
So we see a rise in volume beginning in September and a significant rise in that volume the last four weeks.
MACD Historgram is below the 0 line at -15.045. It does appear to be ticking upward – bullish.
The MACD Fast line looks like it is ready to cross up through the slow line. If that happens, that would be a Bullish sign.
Accumulation/Distribution down ticked sharply this week, which is a divergence from the volume. I would have expected an uptick here. Perhaps this is a warning signal of what lies ahead.
Happy Trading
May We All Make More $$$ Faster
Likesmoney
http://likesmoney.comxa.com/
