I charted the weekly price action for the Dow Jones Industrial Average ($INDU) today. The past few days highlighted in the blue square look like a ping-pong ball bouncing off the table and being met with a firm paddle on the up side. The key take away from last week’s price action is that the DJIA held the 13,000ish line again. We’re beating that line to a pulp, but it just won’t break again.
That sounds rosey and bullish, but the 50, 100 and 200 day moving averages have all been broken and that’s certainly not bullish. Throw in the decending line of lower highs and you can understand the fear that’s been growing out there. The line of lower lows hasn’t been broken either so that’s good. Both of these lines I’ve drawn are quite steep which tends to mean they will be short lived. I’d like to see a break this coming week which we’ll get even if the DJIA stays flat. With this upcoming week being shortened by the Thanksgiving break and the week after options expiration I don’t plan to base a lot of the future on what we’re about to see. That said, I hope we’re about to see a bounce sideways. I big bounce up just doesn’t seem deserved to me yet. The break through 13,000 doesn’t seem warranted either yet since as Wal-Mart showed us the consumer might be hanging in there longer than some expected.
