Thursday, December 29, 2011

DJIA Chart

Click on Chart to Enlarge

The Dow 30 made a small range doji on Tuesday which was confirmed yesterday with a down day with a close at the bottom of the range.  This occurred in the context of a 4 month high and an attempted breakout above the Oct high which failed as of yesterday's close back below it.  Also the upper bollinger band was just above price.  That may cap any breakout attempt here.

 A lower low than Wednesday's will trigger a daily stochastics sell signal and the weekly stochastics are overbought.  So this is a great short trade set-up here for discretionary traders.  Also the price is just under the 78.6% retracement of the May-Oct decline.  That is often the furthest a rally will go when maintaining the larger trend.

 Gold and silver have both back-tested their bull market trendlines from the underside and now have broken to new lows as of yesterday.  Gold gapped down today, and while on the surface it looks oversold, this has the potential to go into a near vertical decline in this position.  I will move stops again on GLL and SLV soon.

1 comment: