Dow Weekly Update

Dow Weekly Update

The last few weeks on the market have been interesting, with a sell signal on the weekly chart, the bears have come back with a real biting attitude and they want to teach the bulls a lesson. The main concern for me is that we have broken a longer term rising support line (and channel) and this week we closed below it. That is a real thorn in the side for the bulls, however when you zoom back to 2010 just like we have on the chart below you can see this is still a bull market, and we have had sell offs along the way, however they only last a few weeks. So we could be in this process of back and filling again! :-)

Right now we have had 3 red weeks on the candlestick chart below and we are in a  TREAD CAREFULLY stance on the market. A close below this rising support line is not good, however it seems there could be lower prices coming sometime in SEPTEMBER 2013 and that might make sense as every man and his dog is awaiting the federal reserve Tapering news to see if they are going to start withdrawing the billions of dollars they are flooding the market with. My own personal opinion is it will not really matter if the tapering is a small percentage, investors will probably just get on with it and realize it is not the end of the world....however, we expect there to be a little bit of nervousness leading up to this FED Announcement which will occur on the 17th & 18th of SEPTEMBER.... I like the analogy that some analysts out there are calling it SEPT-APER! Very clever, but I must confess not matter what announcement may come, the charts always come first.

Right now the charts below are hinting at lower prices, but even if that does occur in the next few  months, I would not go falling in love with the downside, that is for sure. The bears do have chance to do some damage here or in the next few weeks, but how much we will have to wait and see!?

Dow Weekly Update

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Dow Jones Weekly Chart

Dow Jones Weekly Chart

Top callers and those shorting this market, but be very frustrated right now. The DOW JONES WEEKLY CHART Below is show how strong and resilient this market is. You do not even have to guess when you look at the weekly chart.

The last major dip on the market seems to have just created another bullish flag we have now broken out of. I do agree this market is a little overbought, but I have been getting emails from my readers since the DOW was at 12,000 trying to convince me the market was topping out and a crash was coming. So far we have not seen that at all. It is better to let the charts do the talking for now, and right now they keep telling us a different story.

Eventually we will get to major extremes in the market, but the market can remain in extremes longer then anyone can imagine. Better to trade what you see today, not what you expect to happen tomorrow.

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