DJIA ($INDU) Chart – November 9, 2007

What a F*cked up week that was!  I went back to last weekend’s DJIA chart and added in some edits in italics to highlight where the Dow Jones Industrials lost it from a technical analysis view. Throw in the news I got at the beginning of the week (which apparently shook all of Wall Street with concern) and then delays from the companies my wife and I have been interviewing with and we couldn’t have looked forward to the weekend much more than we did.  Alas, I took my son to my parents’ house where he’ll have a blast all day and my wife and I can do nothing for the rest of the day aside from this post, watch a movie and watch the UGA/Auburn football game.

There’s hope though.  We were both told on Friday to expect offers (one for me and two for my wife) in the first half of the week.  The DJIA broke through support at the 200 day moving average which is a very bad sign. Has panic taken over for everyone or does that 13,000 line have one more Atlas-like move to hold it all up?

I circled the seven times the DJIA has touched or at least been very close to touching the exact same line since mid-April.  While I think the breaking of the 200 day moving average (which is extremely close to the 50 week moving average above that also broke) is a significant signal, breaking the 13,000 mark and closing below it for two days could be even bigger.  250 points below that is the ever-powerful trend line of higher lows.  We’ve been working towards it fast and if the DJIA breaks 13,000 you can feel confident we’ll hit that line. The last ditch chance to save any money will be the 100 week moving average, but we’ll have to go all of the way down to around 12,500 for that.  It’s possible.

I’ve kept my Market Sentiment indicator on the home page set to neutral, maybe I should add in with a lean toward clueless.  Clearly I shouldn’t have been so optimistic last week and changed it once we crossed back below the 50 day moving average.  Then again, I’m less of a trader and more of an investor.  With these few remaining road blocks I pointed out earlier not far below the current price, I’m holding on to that glimmer of hope that with every worst case scenario possibly priced in already, we could be ready to level off soon.

(Edit on 11/12: I just noticed that if the DJIA drops to 12,852 we will have hit another technical correction.  That’s 10% down from it’s high.  When we hit that 10% point intraday in August, we rebounded huge within a few minutes)