Danger: 10,000 points Resistance Zone!
The Dow closed down by 81 points today, retreating over 160 points from today's high as the 10,000 points resistance zone starts exerting its influence.
Yes, today's move is totally technical as there is nothing in the Fed's message to blame the Fed for today's ditch. In fact, the Dow rallied briefly and came within 100 points from the 10,000 points level before a sudden wave of profit taking took over. It does seem like investors are indeed fearful of getting caught in the expected 10,000 points consolidation and has decided to take profit slightly earlier. Indeed, the 10,000 points level can be deemed the dividing point between a weak Dow and a strong Dow. As I have said 2 days ago, with the Dow building up short term bearish momentum and at short term overbought condition, it is not strange to see it test the 9600 level before moving on any further. One thing we learnt today is how powerful the 10,000 points resistance zone is going to be. As such, it would not be surprising even for the Dow to take an intermediate correction at about the 10,000 points level. This is definitely not the time to be newly bullish for the short term.
For now, the Dow remains in all out bull trend.
Yes, today's move is totally technical as there is nothing in the Fed's message to blame the Fed for today's ditch. In fact, the Dow rallied briefly and came within 100 points from the 10,000 points level before a sudden wave of profit taking took over. It does seem like investors are indeed fearful of getting caught in the expected 10,000 points consolidation and has decided to take profit slightly earlier. Indeed, the 10,000 points level can be deemed the dividing point between a weak Dow and a strong Dow. As I have said 2 days ago, with the Dow building up short term bearish momentum and at short term overbought condition, it is not strange to see it test the 9600 level before moving on any further. One thing we learnt today is how powerful the 10,000 points resistance zone is going to be. As such, it would not be surprising even for the Dow to take an intermediate correction at about the 10,000 points level. This is definitely not the time to be newly bullish for the short term.
For now, the Dow remains in all out bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 5:52 PM
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