cyclichigh's - doin' it nude thursday, page-65

In America:

Dow Industrials -3.2%
Dow Transports -3.81%
SP500 -3.67%
Russell 2000 -4.82%
Nasdaq100 -3.58%

Comment: Bloodbath – on heavier volume. Support around 11600 is the next line of defence.

NewHighs/NewLows 29/39. NH
Technical Comment on the Dow Industrials:
The DJIA finished at 11780.9. Below support at 11900, marginally below uptrend line from mid October and below the 200Day Moving Average.
Below the 10-Day MA. Positive.
Indicators:
* Stochastic: 65.5. Below its signal line and falling. Negative.
* RSI.9 is at 47.9. Below its mid-line. Negative.
* MACD Histogram below Zero. And falling. Negative
* MACD above zero. Positive.
* CCI.14: -20.1. Negative.

For the past three weeks the Dow Industrials has been in a sideways consolidation, oscillating around the important 200-Day Moving Average.

Support and Resistance: 11600-12300.

Under normal (trending) circumstances, the action today on the chart and the indicators would be a simple sell signal. But under sideways (non-trending) circumstances, the momentum indicators are not very useful. So we have to wait for a break below 11600 support for an indication of a major reversal to the downside. If that happens, the Dow Industrials will have formed a relatively large double top – usually a reliable formation.

Now - I'm not saying we'll break 11600 - but watch out if we do.

Yesterday I said: ”A solid break higher here on better volume and we’re probably looking at a Turkey Gobbler rally. A pull-back off resistance, and it’s probably just Kentucky Fried for Thanksgiving (24 November). I think I’m buying shares in Kentucky Fried.” At this stage I’m looking finger lickin’ good. :)


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