Tuesday, November 16, 2010

Dow on the Blink

I am very well aware that the last post's title was "Dow to 16,000". That was right after Ben and the Inkjets announced $600 billion QE2. Things haven't changed much in the US, I don't think, but ever since it has been the "sell whatever the news is" market. The debt crisis in Ireland hasn't helped either.

Here's a 1-year daily chart of Dow. It's a simple chart with just the Bollinger band, and intermediate/long-term indicators. It stopped today at the lower Bollinger band. If this doesn't give support, the next suppot level looks like 10,700 area. The intermediate/long indicators - CCI set at 133, slow stochastics set at 89 - are signaling a potential turning point. CCI is right now 100.11. If it breaks below 100, the bull run since September may be over. The same thing with slow stochastics. It is just about to cross below 80.

I am not putting any new trade, long or short. It does not feel safe here. Instead of TA, I have been paying more attention to what's happening politically in the US and Europe.

(How can a stock market of a country where you have to allow a total stranger put his/her hands inside your pants so that you can get on an airplane go up? That's what I have been wondering since the beginning of November, and the answer so far is no it cannot.)

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