Post Quadruple Witching Week
Quadruple witching day last Friday ended exactly the way I expected it last week, no big moves but big volume (read everything about what Quadruple Witching is). The Dow ended last Friday up marginally by only 13 points and finished the week up 1.39%.
If last week is an important week for the market to test the resistance level hanging over the S&P500, this week would be critical. The Nasdaq composite has broken out of the July highs but has barely broken out enough to be save from a significant pullback. The S&P500 continues to linger at the 1125 resistance and the Dow, even though broken the 200MA resistance, is yet to come up against the August high. All in all, with all major indices still struggling with strong resistance along with the fact that they are all overbought on the short term basis, we could see the pullback I mentioned last week before the market has the strength to stage a real breakout. Yes, with the higher low formed in late August, odds now favor a topside breakout but as trend followers, we don't make that decision, the market do and we simply wait for it to happen and ride along with it.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
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If last week is an important week for the market to test the resistance level hanging over the S&P500, this week would be critical. The Nasdaq composite has broken out of the July highs but has barely broken out enough to be save from a significant pullback. The S&P500 continues to linger at the 1125 resistance and the Dow, even though broken the 200MA resistance, is yet to come up against the August high. All in all, with all major indices still struggling with strong resistance along with the fact that they are all overbought on the short term basis, we could see the pullback I mentioned last week before the market has the strength to stage a real breakout. Yes, with the higher low formed in late August, odds now favor a topside breakout but as trend followers, we don't make that decision, the market do and we simply wait for it to happen and ride along with it.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 10:04 PM
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