Stock Market Analysis

Monday, April 12, 2010

11,000 Points Looms...

The Dow made a dash for new high last Friday and closed up 70 points, ending the week at 10997 points, just a tad short of 11,000 points.

It seems like the 72 points drop last Wednesday was the single day drop I was talking about that will give rise to a new high. The Dow is coming up against a significant psychological resistance level, the 11,000 points level. I would expect some volatility around this area before the market makes further highs. In fact, the 11,000 points level coincides with the Dow's weekly 200MA, which again is expected to be a significant resistance level. As such, I would expect a few week of volatility around this level before it ultimately breaks out.

It is options expiration week ahead again (see Stock Market Calendar) with the top movers this week being the Empire State Index, Philley Fed and Jobless claims on Thursday. The Empire State Index and Philley Fed are already in pre-recession levels so I hope investors do not take volatility in those numbers too hard. Jobless claims remain much higher than pre-recession levels but its 4 weeks moving average has exhibited a steady and healthy downtrend.

For now, the Dow turns an all out bull trend.

Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!


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