DJIA 9/4/09

LONG TERM
* the dow continues to trend up (B) since mar09. it is currently on the 2nd upleg after finding support at 8000 in jul09.

* volume contracts during the 6mo price advance reasserting the dominance of the primary downtrend (A) and the view that the uptrend is a countertrend rally in a bear market.

* the slope of the 180d ma has turned positive and has aligned itself below the shorter uptrending mas and price supporting an optimistic but unconfirmed sentiment that the 6mo uptrend is the first move up of a market reversal.

* the primary downtrend can stand a correction rally as long as it does not go over the trendline (A).

* the daily and weekly ichimoku charts appear to support the above view.

SHORT TERM

* the macd peaks in aug09 (D) diverges away from price peaks in the daily chart raising the possibility of a near term pullback in the 6mo uptrend.

SENTIMENT

* for now, i expect the dow to continue moving within the confines of the up trending price channel (B) until it approaches trendline resistance (A) i.e. 11000 thereabouts, where selling pressure can be reasonably expected to appear.

* the next 2 critical levels to lookout for in the near future are the primary (A) and the intermediate (B) trendlines. an up or down break beyond these limits will have significant implications going forward.

* potential price targets in my recent posts remain unchanged.