Reaching Resistance at 27,600
The Dow continued slightly higher Friday, putting it within striking distance of the important 27,600 level. We note a small range throughout the day, which finally pushed upward in the last hour. This indicates some accumulation ahead of Monday, which is a bullish sign. The question is whether the market can continue to gain ground after moving 1,300 points in the past 5 sessions.
If the market can get through 27,600 (the upper resistance line) it could continue to the long term Resistance line at February highs. Since we have come 1,300 points in 5 sessions, I am expecting a reversion off this level on Monday, which could turn into a consolidation at highs, or a pull-back to the 38% Retracement level at about 27,000.
DJIA – Daily
Thursday I felt the market had come too far and would likely revert near this important Resistance Level. The market is digesting a lot of news right now, and apparently sees it as overall positive. We can keep the same positioning, looking for weakness in specific stocks and sectors to play the reversions.