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DOW THEORY ALSO GIVES STOCK WARNING; Suppose close below 12,950,… then panic 12,866-12,600. They were warning signs. Dow is trading in down trend since 4 weeks…
Actually, Dow Jones is trading at Good support… Suppose to take this support, then DJIA will be move up trend…
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Dow Jones trading at resistance of flag pattern but last trading secession was clearly sign of sell on Friday which was long bearish candle. You can see easily 12731.
Suppose to close it above this resistance, then market will be fire!
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We’re hearing much talk about the potential Bear Flag pattern on the S&P 500 Daily Chart.
Let’s take a mid-week update on the pattern and note the current key price boundary levels to watch for clues.
First, here’s the S&P 500 Daily Chart trend-lines structure:
Moving from right to left, we see the current “Bear Flag” consolidation pattern stretching from early June to present.
The lower rising trendline resides near 1,340 while the upper rising trendline continues near 1,390. The 30-min chart below emphasizes these trendline levels.
Now, moving to the left of the chart, the last time we saw a similar Daily Chart ‘flag’ struture was from August to October 2011.
While price did break the downside trendline, the full downside target was NOT achieved due to a power-rally which developed off the 1,100 Index level.
From there, price structure continued to trade mostly in a “Creeper” uptrend, bound by the prior “flag” trendlines until the breakdown of May 2012.
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The Chinese government reported imports rose just 6.3 percent last month from a year earlier, less than half the 12.7 percent expected increase. No doubt this reflects softening domestic demand in the world’s second largest economy and one reason why commodities have been selling off.
Don’t you think the government has to be cooking up something big?
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Note the weekly bear flag on the S&P 500 index. You may call it by a number of different names (wedge, pullback, anti, flag, etc.), but the concept is the same: A period of contracting volatility with an upward bias following a sharp selloff. This pattern could be expected to resolve downward, providing a headwind for bearish trades over the next several weeks. Be aware that weekly patterns can take a long time to play out, and there is plenty of room for upswings on daily and intraday timeframes even if this weekly pattern resolves cleanly. Knowledge of higher-timeframe technical patterns often provides good context for trades on lower timeframes. This is an important part of understanding evolving market structure and potential technical risk factors.
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Stocks ended a volatile week on a strong note, with all three major indexes finishing sharply higher in trading today. Stocks bounced back after Thursday’s huge sell-off.
The DJIA ended the day 0.53% higher at 12,640.78, the S&P 500 ended the day 0.72% higher at 1,335.02, and the Nasdaq ended the day 1.17% higher at 2,892.52.
The week began on a promising note as Greek voters opted for the pro-bailout parties in the election last Sunday. Although the Greek election results ended a great deal of uncertainty, Spanish borrowing costs rose to a euro-era high. Italian borrowing costs also surged raising renewed worries over the euro zone debt crisis.
Investors’ sentiment was also weighed down by lack of action from the Federal Reserve at the end of its two-day monetary policy meeting on Wednesday. The Fed extended its Operation Twist program on Wednesday, which was expected. However, the central bank did not hint at more aggressive monetary easing.
Worries over the euro zone, lack of action from the Fed, and some concerns over global economic growth sparked a huge sell-off on Thursday.
Although stocks made a recovery today, the Dow Jones and S&P 500 ended lower for the week. The Dow Jones fell 0.99%, while the S&P 500 fell 0.58% for the week. Nasdaq managed to post a 0.68% gain for the week.
Financials led the gains in trading today, gaining 1%. The gains in the sector were led by bank stocks, which rose despite a rating downgrade of five of the six biggest U.S. banks by Moody’s. The ratings agency also downgraded the credit rating of several European banks.
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