Dow Jones ($INDU) Chart

My charting of the Dow Jones ($INDU) for this week is really interesting.  For variety, I changed the look again and charted the daily prices for the Dow going back to October 2006.  That’s close to the beginning of the narrow trading range we saw that carried through most of February.  After nose diving below that trading channel, the Dow worked its way back above the previous ceiling with only a blink of an eye.  That previous ceiling line then became the support line until last week.  Last week the Dow fell back to the lower line again and even dipped below if briefly.  Those two lines have been slowly coming closer together and will cross each other soon.

A line starting in May that I thought could be a new support line was broken after being touched three times.  A new downward trending line could be emerging from the middle of June through Friday.  This line is fairly steep and we won’t have to wait long to see if it does act as a celing. 

Last, but certainly not least, the Dow is still stuck below its 10 and 20 day moving averages.  This is a very bearish sign and could be the barier to new highs in the short term.  On a slightly more positive sign, the 50 day moving average has provided a little support although we crossed through it a couple of times last week, but seemed to be able to close at or above it each day.

This should be a low volume week with the holiday stuck in the middle.  With weeks like this the markets can move in big swings without a strong front on either side to stop the momentum.  That being said, this upcoming week’s chart might have to be taken with a grain of salt, but any gains or losses taken can be taken as real.

Click on the thumbnail below to view the chart.

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