moolamanic's - holdin' 'n' grinnin' - tuesday, page-31

In America:

Dow Industrials +0.63%
Dow Transports +1.52%
SP500 +1.03%
Russell 2000 +1.63%
Nasdaq100 +1.08%

Comment: The Dow Industrial Average was up moderately today, while other indices were stronger. The daily candle hides a lot of action – with a battle being waged by the bulls and the bears throughout the afternoon. For most of the time, the bears had the upper hand taking the Dow down about 150 points from its mid-day high to its low at around 3.20 and that was close to the opening price. The bulls then raised a counter attack to put the index well into positive territory. So the bulls still have the upper hand.

NewHighs/NewLows 120/8. NH
Technical Comment on the Dow Industrials:

The Dow finished at 12097.8. Above the 120-Day Exponential Moving Average (blue dotted line) at 11717. Bullish.
Indicators:
* Stochastic: 85.9. Overbought.
* RSI.9 is at 63.2. Above 50. Positive.
* MACD Histogram. Above Zero. Positive. But falling
* MACD. Marginally above Zero. Neutral
* CCI.14: +94.7. Positive.

The Stochastic is overbought, but it is the only indicator which is. The stochastic can remain in the overbought zone for long periods of time as seen back in October. Momentum is falling as indicated by the MACD Histogram. At this stage, this looks like consolidation. A big down day on heavy volume would negate that.

The chart is now marginally above the down trend line from late October, but still below the horizontal resistance line at 12172.4. Today’s action popped marginally above that today and fell. Not a good sign. The Index needs to bust through that line on good volume to be convincing. I think we’ll get more sideways consolidation, with maybe a dip, before we see that happen, if it is going to happen.

In the weekend report, I suggested a watch on both the Dow Industrials and the AUD/USD to get an idea of short term direction. The currency pair remained in consolidation mode – but the candles are bearish.

Redbacka