PRICE AND TURNOVER
Close: 12,570.22
Change: +189.20 (1.53%)
Volume: 746,891,976
MARKET BREADTH (NYSE)
Net adv/dec issues: +1,793
Net new highs/lows: -1
Net up/down volume: +2,700,293,884
TECHNICALS
Intermediate downtrend, short term consolidation
Support 12,000 Resistance 12,800
OUTLOOK
The Dow rallies for a second day picking up another 189pts from where it ended last Friday. Market indicators show broad participation in this uptick but volume contraction is a mood killer. We see a number of technically significant things happen today, i.e. (1) a penetrating close outside the symmetrical triangle-being a continuation pattern, this breakout is usually viewed as a heads up for near term move as long as it breaks in the direction of the prior trend, but since it didn't I will view this particular evidence with caution, (2) a break of the intermediate trendline-a trendline break is a typical early signal that the trend may be changing, and (3) a possible new and higher support level of 12,200-a higher low is a signal that a new provisional uptrend may be in the offing. All of these things point to a high odds near term advance. The next critical level to look out for is the 12,800 level where we can get a take on whether this move will morph into a new short term uptrend or merely unfold into a range pattern.
Close: 12,570.22
Change: +189.20 (1.53%)
Volume: 746,891,976
MARKET BREADTH (NYSE)
Net adv/dec issues: +1,793
Net new highs/lows: -1
Net up/down volume: +2,700,293,884
TECHNICALS
Intermediate downtrend, short term consolidation
Support 12,000 Resistance 12,800
OUTLOOK
The Dow rallies for a second day picking up another 189pts from where it ended last Friday. Market indicators show broad participation in this uptick but volume contraction is a mood killer. We see a number of technically significant things happen today, i.e. (1) a penetrating close outside the symmetrical triangle-being a continuation pattern, this breakout is usually viewed as a heads up for near term move as long as it breaks in the direction of the prior trend, but since it didn't I will view this particular evidence with caution, (2) a break of the intermediate trendline-a trendline break is a typical early signal that the trend may be changing, and (3) a possible new and higher support level of 12,200-a higher low is a signal that a new provisional uptrend may be in the offing. All of these things point to a high odds near term advance. The next critical level to look out for is the 12,800 level where we can get a take on whether this move will morph into a new short term uptrend or merely unfold into a range pattern.
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