TRENDS
(1) PRIMARY DOWNTREND
(2) INTERMEDIATE DOWNTREND
(3) SHORT TERM DOWNTREND: Correction wave | Prior support 7449 | Prior resistance 9653 | Potential resistance: BB centerline 8667 -Trendline resistance 8750 | MACD and RSI: downtrend, weakening, positive divergence vs. price | Price objective of this countertrend 8600 | Price objective of next downleg 6500
MARKET OUTLOOK
Positive market sentiment shrugs off today's disappointing economic data extending the Dow's rally into its 4th day. The market average is now at an area where (a) the 20d MA 8667, (b) trendline resistance 8750, and (c) 61.8% fibonacci 8800 levels converge. These are points where selling pressure can potentially emerge and send the index into a new downleg. It is interesting to note that a bullish divergence has developed. As the Dow set a lower low early this week, both the MACD and RSI exhibited higher troughs. This is often, but not always, a pre-cursor to trend reversals. Keep an eye out in case price eventually follows the lead. The Dow is at or near critical levels of potential resistance and, for now, technical rules favor the odds of the rally being cut down shortly to resume the short term downtrend. SELL.
NEWS
Consumer Confidence Hits 28-Year Low in November| Reuters | 26 Nov 2008 | 11:48 AM ET
New-Home Sales Tumble to 18-Year Low in October | Reuters | 26 Nov 2008 | 10:36 AM ET
(1) PRIMARY DOWNTREND
(2) INTERMEDIATE DOWNTREND
(3) SHORT TERM DOWNTREND: Correction wave | Prior support 7449 | Prior resistance 9653 | Potential resistance: BB centerline 8667 -Trendline resistance 8750 | MACD and RSI: downtrend, weakening, positive divergence vs. price | Price objective of this countertrend 8600 | Price objective of next downleg 6500
MARKET OUTLOOK
Positive market sentiment shrugs off today's disappointing economic data extending the Dow's rally into its 4th day. The market average is now at an area where (a) the 20d MA 8667, (b) trendline resistance 8750, and (c) 61.8% fibonacci 8800 levels converge. These are points where selling pressure can potentially emerge and send the index into a new downleg. It is interesting to note that a bullish divergence has developed. As the Dow set a lower low early this week, both the MACD and RSI exhibited higher troughs. This is often, but not always, a pre-cursor to trend reversals. Keep an eye out in case price eventually follows the lead. The Dow is at or near critical levels of potential resistance and, for now, technical rules favor the odds of the rally being cut down shortly to resume the short term downtrend. SELL.
NEWS
Consumer Confidence Hits 28-Year Low in November| Reuters | 26 Nov 2008 | 11:48 AM ET
New-Home Sales Tumble to 18-Year Low in October | Reuters | 26 Nov 2008 | 10:36 AM ET
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