weekend wonderings, page-10

I posted this this morning on Weekend Charting. I would be interested in any views from this thread. I'm glad that I am not the only one who noted Friday's doji.


Below is my take on the DOW which for anyone exposed to the majors is probably the most important chart of the week. For lots of reasons we took heavy losses this week. Most of them have not yet been closed out so I am intensely interested on where the DOW might be going. I would be very grateful for any comments on my analysis. My bottom line conclusion is that things don't look nearly as bad as they did immediately after Friday's open. In fact there is good cause for optimisim. My question for everyone out there however is - Am I seeing what I want to see or am I right?? Needless to say I have also looked at the XJO and may have a go at posting charts on it later but with the XJO joined at the hip to the DOW it seems to me that the DOW chart is more significant right now.

The first chart below is a weekly chart. Last week's low (on Friday) rests on both a 50% and 61.8% Fib level. Encouragingly the last candle is a highwave candle (reversal signal) with a clear bounce off the Fib levels. However the uptrend line (in red) since last Feb has been broken convincingly.









Chart two is a daily chart. Guppy contends that it shows a head and shoulders bottom. If he is right then the upward projection (top yellow line) doesn't stop until 11,700 which is also the approximate top point of 2008's August/September breather in the bear market. The 195 EMA was almost touched before Friday afternoon's bounce.







Chart three is a zoom in to show Friday's dragon fly doji. This is a candle pattern reversal signal when found at the bottom of a downtrend. Significantly the market opened and closed above the 10,000 level (red line). The tail of the doji indicates a failed attempt by the market to push to lower levels.






Chart four is an intraday chart showing Friday's DOW. The rally clearly started just before 2pm and it looks like short covering may have begun just after 3pm. Perhaps the big players on the DOW know something that we don't about the debt crisis in Europe and its possible resolution over the weekend.













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Our posts are personal opinion only and should not be construed as advice to others - good luck to all.

06/02/10 12:39 (View) Back Post Reply (+2)