Still A Healthy Young Bull...

The Dow made a fantastic 377.67 points rally last week on uncle Ben's fantastic rate cut package. In fact, the Dow has made a 706.81 points over the last 2 weeks! That certainly makes one wonder... is it now overbought? is it time for a little pullback? Well, technically, YES. Especially with the all time high resistance level of 14000 points looming in the horizon. That is also why the Dow has been trading sideways over the past 3 trading days in an attempt to digest some of these short term overbought sentiments. However, that 3 days has not done anything significant to bring the Dow out of being short term overbought on our indicators. 2 things might happen from this point onwards. 1, The Dow continues sideways for a few days more or pullback for a couple of days and then make a grand break to new highs. 2, The Dow go straight for the 14000 points and then fail to make a break, correcting back down signigicantly (probably to the 13500 level). Whatever it might be, it is certainly not the job of traders like us to predict what will happen. Our job is to make sure we know what to do in order to profit should any of the 2 scenarios happen.


Dow Technical Chart By Best Charting Software TC2007!