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11/11/2005
Dow Jones Industrials is up against the major resistance, again. Although, statistically the chart pattern is bullish, the historical resistance is great. The resistance is as much on the charts as it is in the heads of investors and traders. The month of October was very weak in the stock market, however, on 10.27.2005 the bottom of the pattern was made and the market rallied (just as I expected). Unfortunately for the bears, there was no selling follow-through and a very strong short covering rally emerged.
Immediate resistance: 10700 on the Dow and of course there is a higher level resistance at 11000. It will ultimately come down to the money inflows. If the investor money inflows will be up to the expectations, we will have a decent increase in the indices. If not, then the market will do nothing.
P.S. I am amazed how many analysts and managers think that the Fed will stop soon with the rate hikes, when the Federal Fund Rate Futures are clearly pointing otherwise. (See the Projected Interest Rates Page)
This is not a trade recommendation and no one should treat it as such.
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Recommended Links on this topic:
10.27.2005 NYSE and NASDAQ At LO Indicators Commitment of Traders Synthetic Report for all Equity Futures Commitment of Traders Synthetic Report for Dow Jones Mini and Regular |
