DOW update
Close:
Since the DOW broke down from its ascending wedge seven trading days ago (dotted line), it has only managed a close above its 20 dma on one occasion. This is not surprising given that the entire July rally was on declining volume. Even today, it flunked the momentum test. Trendline support is around 11395. Note that bulls held closes above the 50% mark (11347) since the wedge drop, this will be a good spot to load your alarms.
Even though I think we are eventually headed lower (ES 1249/NQ 1812), there is always the danger of some pre-market intervention announcement ahead of the elections. This normally occurs on washout days, when everyone panics. We are far from that. Nevertheless, trade this day by day using bonds as your cue. We have a gap right above us (ES 1285/1292 and NQ 1919/1930), another reason to day trade.
This entry was posted
on Wednesday, August 27, 2008 at 8/27/2008 08:32:00 PM.
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