“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.
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.