Comment: You can see the long upper tail on today’s candle. That indicates selling pressure after the Index was up earlier in the day. At around 2.00 p.m. the Dow 30 was up moderately then the media reported comments by Merkel (which she had already made the previous Friday) and the rot set in. Uncle Bennie wasn’t handing out lollies to the kiddies at 2.30 (FOMC announcement) and the selling continued through till about 3.30 when a little push up occurred. But nothing of great significance. Technically, it looks like a bear flag – not good. Volume increased to be the highest in the past eight days. So the bears are started to growl louder.
NewHighs/NewLows 64/62 NH Technical Comment on the Dow 30:
The Dow finished at 11954.9. Above the 120-Day Exponential Moving Average (blue dotted line) at 1227.3. Bullish. Indicators: * Stochastic: 80.1. Falling. Caution. * RSI.9 is at 50.7. Marginally above 50. Neutral. * MACD Histogram. Below Zero and falling. Negative. * MACD. Above Zero. Positive. * CCI.14: +32. Falling. It needs to bounce around the zero area to give the bulls a chance
The short term trend is down. The Dow 30 at 11954.9 remains within the confines of narrow Support/Resistance 11897.3/12221.3, but only just. It looks like tomorrow is “do or die”. And tonight in America traders are reading Dr Seuss’s "The Grinch that Stole Christmas" to their kids.
Finally, Options Expiry Week in December has a strong bullish bias. But the market hasn’t taken much notice of seasonal factors lately. Remember what happened in the week prior to Thanksgiving – also an historically strong bullish period.
The market is in wait-and-see mode. Let’s see what tomorrow brings.
A chart for the Gold Bugs:
This is a weekly chart of the Price of Gold in $U.S. Since January, 2009, the chart has respected the 34-Week Moving Average and that’s where it is again. The 34WMA is at 1655 while POG finished at 1665.5. Major Horizontal Support then lies at 1588.8. Expect to see more selling if the 34WMA is broken as this is closely watched by traders. A rise above the oblique resistance line from early September would be bullish. That’s currently around 1737. Horizontal Resistance then lies at 1793.5.
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