This week I’d like to coddiwomple through making mistakes and staying data-dependent to gain a...
Interesting Pattern Forming in DJIA
07/17/2009 12:01 am EST
I’ve tended to focus a lot of my analysis on the S&P 500, but let’s take a step back to look at the Dow Jones Index for possible clues and an interesting pattern that could be forming on the daily chart.
As much as I hesitate to believe it, there is a possibility that the Dow is forming an expanding triangle or broadening formation, with an upside target near 9,000 (which would be a retest of the January highs).
We still have a negative volume divergence and a negative triple-swing momentum divergence, which the bulls are going to have to overcome, and I think it will be difficult to do, particularly given the summer seasonality whereby stocks tend to experience seasonal weakness in the summer months, or at least a flat, trading range as volatility/volume is expected to decrease.
I’m mainly posting this as a way of saying “Hmm—This is interesting,” and basing it off the swing highs and lows and the trend lines that originate from the May highs and lows, which seems a natural fit.
Without effort, price shattered overhead EMA confluence resistance thanks to Intel’s (INTC) earnings surprise and the market’s reaction to it. Keep this as a possibility as we get more information.
By Corey Rosenbloom of AfraidToTrade.com
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