Bullish Formation
“We have basically the same situation as yesterday, with the market forming a very nice trend line at the consolidation highs, which was reinforced today.” Friday was a continuation of the same (bullish) behavior, with a good triangle pattern intraday that should lead to an upside break if we can cross 28,000 with conviction over the next few sessions.
DJIA – 39 Minutes
Again, since the market moved sideways to down along the line we drew yesterday, it is in the same stance going into Monday, with a stronger case for an upside move due to the formation marked in the 39 Minute Chart. However, we must watch for a break of 27,600 which would be short term bearish.
DJIA – Daily
Monday, we will be watching for breaks at 27,600 and 28,000 or for a continued pull-back to 27,600 and a bounce off that line. These action levels should once again have set up well for Monday trading.
Index level marking is important because the market as a whole perceives support and resistance this way. Looking at index charts, it’s uncanny how often a line will hold and form strong Support or Resistance. It’s a phenomenon I have seen repeat itself over and over these past 30 years and it’s definitely worth paying attention to!
Good luck in your trading.
Ed Downs
