As bullish as the Market was yesterday, we had reason to pause today. Looking at the 15 Minute Chart, we see weakness coming in at our Resistance Level of 24,800, leading to a faitly strong sell-off at the end of the day. Is this the start of a reversion? We also see an intra-day lower high form, so IMHO the odds of a continued down move are fairly high. Watch that line at 24,800! It is now Key Resistance in this market.
DJIA – 15 Minutes
The Daily Chart shows the large bar from yesterday and the Broadening Consolidation that has formed over the past 6 weeks. So what we have is a very strong move indicating that a push to the top of that formation is possible. The market can certainly continue to discount the news and push higher. We can see it wants to do that. It’s all about how much it can discount the negative pressures on the economy. So far, it just doesn’t seem to care much about that. The market is looking for any reason to rally. But for how much longer? It’s an unprecedented situation, with artificial forces pushing it higher. We have never seen anything like this. The question is, “Will the market rally past the negative news on the basis of a future recovery?” We’ve never seen it happen before, but this could be the first time.
DJIA – Daily
Commentary: Clearly, there is a lot of news in the market right now on both sides. You know I am skeptical of recent rallies where the long term is concerned. But the market can easily power through and move higher if it discounts the negative news enough. Given enough buying pressure from Europe and enough Stimulus, it CAN go higher. But when will we see the Day of Reckoning? When it breaks 23,000 (down) or 26,000 (up).
Ed Downs
