This week’s view of the one year weekly Dow ($INDU) chart is really interesting to me after the much needed pounded we finally received last week. I would have been happy with the chart even if we didn’t have the Friday rally. Check out circle A on the chart below. It marks the low of the week which is also the point of the 10 week moving average that offered support through the long circle B. Drawing a trend line continuing from the highs seen in circle B through Friday and you see that it hits directly with the same point in circle A around 13,424. As I said, I would have been happy for that to be the end of the story, we took a hit and found support. Before the week ended, Friday had to come to the rescue to bring the closing price back into circle C. Interestingly, circle C is home to the end of the trend line that started from the lows in March. While we broke that trend line which could be a sign of further dips soon, we closed the week dead on that same line. Circle C is also part of the same trend line that started way back in July in circle D.
None of this drawing of lines could mean a thing if the bond yields continue to rise with any more troubling inflationary data that comes out. Either way, I’m expecting a rough week since Wall Street never likes uncertainty and there’s a lot of economic data next week that could have the bears making a strong stand before we have our next clues in.
Technorati Tags: Stock Charts, investing, stocks, Dow Jones