This blog is committed to the serious study and valid understanding of technical analysis and its objective application to stock selection, risk management and execution primarily in the context of trading stocks listed in the Philippine Stock Exchange (PSE).

Tuesday, September 30, 2008

DJIA 9/29/08 HITS MULTI YEAR LOW ON FAILED BAILOUT PLAN

PRICE AND TURNOVER
Close 10,365.45 
Change -777.68 -6.98%
Volume 1.2B

MARKET BREADTH NYSE
Net Advancing Issues -3,131
Net New Highs -1056
Net Up Volume -2,679,173,196

TRENDS
*PRIMARY DOWNTREND | Directional wave | Prior support 10827-BROKEN | Prior resistance 13136
*INTERMEDIATE DOWNTREND | Directional wave | Prior support 10827-BROKEN | Prior resistance 11867
*SHORT TERM DOWNTREND | Prior support 10459-BROKEN | Prior resistance 11577

CHART WATCH
After recently breaking the primary and intermediate support of 10827, the Dow today wipes out the short term support of 10459, closing at 10365, a multiyear low that goes back close to a 3 year period. I purposely used the weekly chart today to illustrate the interaction between the different trends of important timeframes. There is no question that (1) all the trends-primary, intermediate and minor-are down, (2) The breach of the 3 year lows does not give any hint of a market bottoming, (3) The increased volatility accompanying the downside moves heightens the momentum of the declining trends. Sell on rallies.

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