Where is the Dow and Mothers heading in 2006?

[lemput]

Well, we're all over this base at 11050. Has anyone got anything on volumes this afternoon... markets seem to be fretting a little over news flows today.

 

[mombasa]

Closed my shorts at just under 11,050. Too much divergence for my liking so am going to sit back and wait now.

 

[chimpmagnet]

Closed my shorts at just under 11,050. Too much divergence for my liking so am going to sit back and wait now.

Me too, exactly the same. Believe it will rise first but too risky for me to place any bets at this stage.

 

[mombasa]

yes, well, I'm stupid enough to go short at 11,039 - shouldn't have had the lunchtime drinks !!!

Hoping that 11,050 is now resistance.

 

[mombasa]

And to top that, just added to my short at 11,058

Still expecting a big drop over the next few days looking at the daily's but the drawdown could be painfull !!!

 

[mombasa]

Also hoping that the 100EMA on hourly acts as resistance.

Ever get the feeling that u shouldn't have done what u just did?

New rule. No trading after drinks.

 

[baifriend]

mixed market signals...

 

[tradesmart]

Well, the breakout north from the ‘diamond’ looked hopeful for the bulls with its implied 11350 target, but with a H&S top forming over the last few sessions, today’s negative data and news promoting a 100+ point fall; the chart has the familiar look of yet another Dow rollover…..

Former resistance at 10960ish could well be tested as support, but today’s largish 25 point opening gap remains unfilled and some might call the falling channel a bull flag…..

Early March should be interesting…..

 

[tradesmart]

Above (Tuesday)

today’s largish 25 point opening gap remains unfilled and some might call the falling channel a bull flag…..

Still in the falling channel and with today’s price action the index has found support at around 10980 YM, forming a double-bottom with the apex height providing a notional target to retest the recent multi-year high at 11165ish….

Plenty of opening gaps have appeared almost daily and have been filled in a random sequence, but the 25gap centred on 11100 still remains unfilled and provides a valuable intermediate target imho.....

 

[mombasa]

Gap closed TS

Now for the ride down.

I hope.

 

[tradesmart]

Last Night:-

the 25gap centred on 11100 still remains unfilled and provides a valuable intermediate target imho.....

Today:-

Gap closed TS

Yes, Mom, it was closed emphatically after the index spent some time early in the session testing 11000ish support levels repeatedly, forming a triangle as a prelude to an explosive breakout to nail the 11110 gap fill level in no time…..

And certainly a "valuable" target if you'd bought the early lows and held on to the top...!..

Plainly the last hour ‘return trip’ selloff makes the prospect of another hit on 11165 slightly more “notional” than it appeared yesterday…..but return trips of this order often mean a big triangle is in store, so watch what the algorithms have in store for us next week….!…..

 

[tradesmart]

Friday….

…..but return trips of this order often mean a big triangle is in store

Not in this case….!

Today’s action a continuation of Friday’s closing downdraught with a triangle forming over the first half of the session hinting at the target for the evening tank…..

The fall was restrained by the lower falling channel trendline with a small bounce into the close, but the index won’t see true strength unless 11100 is exceeded to the upside imho….continued falls below the lower trendline could see 10850 pronto…

 

[mombasa]

nice analysis TS, however I don't think u should be looking for upside here. We will obviously get them bu the overall trend is down.

I'm currently long but with tight stops.

 

[tradesmart]

I'm currently long but with tight stops

Good luck Mom - I'm favouring the short side myself.....though we might see a bounce of course....

There's a semblance of a descending bear triangle on the 60min chart, and the 10980ish support line was broken yesterday.......stocks are 'correcting' down as bond yields rise..

The 180 triangle height target suggests that we might see 10800 soon, and there's a unfilled gap just below that from early February - these gaps are invariably remembered and filled..

 

[tradesmart]

An ‘inside day’ yesterday with the index intent mainly on testing former 10980 support as resistance from the baseline of Monday’s 10930 low.

Seems tinged with bearishness, but as always there is more than one possible outcome…..

Ed Downs has done a good summary on SignalWatch..

We may see a period short-term consolidation as the Dow deliberates on the validity of yesterday violation of the lower boundary of the established two week trading range. While yesterday's violation of 10,975 was indeed a bearish indication, the 60 minute and daily charts show the index is trading in close proximity to a previously violated resistance level at 10,900. As previously violated resistance will often act as future support, traders should exercise caution with short positions until 10,900 can be decisively violated. Weakness below 10,900 will likely trigger a sharp 100-200 point capitulation toward 10,700.

As the Dow continues to trade in close proximity to 10,975, we should remain cognizant for the potential of a reactionary rally back the previously established trading range. Should the Dow break decisively back above 10,975, we could witness a strong buying surge, propelling the index above 11,000. However, we are not likely to see a profound bullish advance until the Dow breaks above the upper boundary of the trading range near 11,080.

 

[billiondollars]

Bank of Japan Scraps Montary Policy, but Says Interest Rates Will Remain Near Zero

TOKYO (AP) -- The Bank of Japan on Thursday abandoned the super-easy monetary policy it has kept for five years, saying it will gradually raise interest rates and start to cut the excess cash in the banking system amid signs of economic recovery.

I know it's not a Nikkei thread but since the title says 'DOW and Mothers..', I wonder how it will affect other world indices particularly DOW.

 

[tradesmart]

The Bank of Japan on Thursday abandoned the super-easy monetary policy

I wonder how it will affect other world indices particularly DOW

billiondollars – I think the Dow/Naz etc are more concerned with what US interest rates are doing, but a short on USD/JPY will likely pay off – 118.20 now – 116.50 soon, trust me….

Ed Downs yesterday..

Should the Dow break decisively back above 10,975, we could witness a strong buying surge, propelling the index above 11,000

Correct……

The index made it to 11050 early in the session today before selling of to the close…I guess that not many want to hold overnight ahead of the NF payrolls data at 13.30gmt tomorrow…!

However, the late sell-off may have created a ‘higher low’ which could propel the index higher tomorrow if 10960ish support holds…

I also note that the Naz has a large unfilled gap 2280-2285 which if it goes for a ‘fill’ will likely pull the Dow up as well…

NF payrolls will call the shots.....

 

[billiondollars]

billiondollars – I think the Dow/Naz etc are more concerned with what US interest rates are doing, but a short on USD/JPY will likely pay off – 118.20 now – 116.50 soon, trust me….

Thank you, Tradesmart. Ok, Yen will appreciate. But what sort of time frame you are talking about? A week? A month or a quarter? Do you reckon it will happen after this month's FOMC rate decision? Raising US base rate may also lead to dollar appreciation? Sorry if I sound too ignorant.

 

[baifriend]

reasonable, but risky.
we just saw a lower high, to expect a high low is risky.
I worry if the 1095x support breaks, it would be terrible down.

 

[tradesmart]

So the NF Payrolls data was good for the Dow….. .....(but bad for USDJPY shorts… ...$ strengthened across the board….. )

Yesterday;-

the late sell-off may have created a ‘higher low’ which could propel the index higher tomorrow if 10960ish support holds…

The higher low worked well as support, and the NFP inspired aggressive buying promoted a 100+ point ride up to just over the top trendline followed by a 50% fib pullback and a late bounce to 11080 (there were a few small gaps on the YM 1min chart to fill..!)

Clearly a break above the top trendline at 11100 is required to maintain bullish momentum and break the downtrend……or rollover ....(again..!)