Buying Begins Around the 10,000 Points Support
The Dow continues its path towards the 10,000 points support level that I mentioned a few days ago as it ditched 115 points.
Today's ditch comes on the back of the worse than expected durable goods order and many analysts are quick to point fingers at that number. What about the better than expected jobless claims then? Well, the truth is, you can always find plenty of reasons to be optimistic or pessimistic about the market every day and on technical driven short term moves like this one, it is pretty amusing to see analysts point fingers at some of the news and make them the cause of everything.
Make no mistakes, this is an intermediate term pullback that every primary bull trend needs in order to stay healthy and eventually lead to new highs. There is no such thing as a market that goes straight up or down. Even in the big bear market of 2008, the market did plenty of intermediate term pull ups as well. The last intermediate pullback was all the way back in July 2009. The market then experienced several short term pullbacks along the way, which is absolutely normal.
The Dow is now just a stone's throw away from the 10,000 points level which I predict to be a strong support level which could end this intermediate pullback. In fact, the Dow came within 55 points from the 10,000 points level today and then pulled up, indicating the presence of buying around that level. Today's trading pattern further convinced me of the 10,000 points support level and I advise against being newly short at this level.
For now, the Dow remains in a short term and intermediate term bear trend within a primary bull trend.
Today's ditch comes on the back of the worse than expected durable goods order and many analysts are quick to point fingers at that number. What about the better than expected jobless claims then? Well, the truth is, you can always find plenty of reasons to be optimistic or pessimistic about the market every day and on technical driven short term moves like this one, it is pretty amusing to see analysts point fingers at some of the news and make them the cause of everything.
Make no mistakes, this is an intermediate term pullback that every primary bull trend needs in order to stay healthy and eventually lead to new highs. There is no such thing as a market that goes straight up or down. Even in the big bear market of 2008, the market did plenty of intermediate term pull ups as well. The last intermediate pullback was all the way back in July 2009. The market then experienced several short term pullbacks along the way, which is absolutely normal.
The Dow is now just a stone's throw away from the 10,000 points level which I predict to be a strong support level which could end this intermediate pullback. In fact, the Dow came within 55 points from the 10,000 points level today and then pulled up, indicating the presence of buying around that level. Today's trading pattern further convinced me of the 10,000 points support level and I advise against being newly short at this level.
For now, the Dow remains in a short term and intermediate term bear trend within a primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 9:52 PM
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