Charting the Dow Jones ($INDU) 7-20-07

I went back about seven months to chart the Dow Jones ($INDU) weekly chart. The two lines I’ve been following for a while are listed on this chart as A & B. Line B was met last week by the shorter Line C. Line B has not been a very reliable floor, but has proven itself strong on more than just a few weeks. Line A hasn’t been broken since it started last fall and we are starting to knock on its door again now, see circle D. Circle E represents the meeting point of Lines B and C and we could see as early as this week which will provide the latest floor for $INDU.

We could be just a couple of weeks away from a big move in the Dow. Once Line C catches up to Line A one will have to give and could cause a surge in either direction. The Dow closed last week off its highs which still gives it room to climb and not break the upper trend line currently in circle D. I don’t see a pull back of more than 500 points coming in the near future with the support offered in circle E right now and the 10 day moving average mixed into the same range.