Sunday, January 08, 2012

Where is the Dow heading?

Today we look at the Dow over a period of 2 to 5 years to get a sense where we are and what we must consider as we try and manage our investments. We are at a critical point where we are either going to have a breakout to the upside or we will have a breakdown to the down side as illustrated in the charts below. First let's look at the 2 year chart for looking at the current top of resistance. It is that highest blue horizontal line.
In the chart above, the bottom red line marks a short term support line. Breaking below this line doesn't mean we have a significant breakdown, but it does mean we need to be careful. In the 5 year chart below, you will see where the next real support line is and this one we must stay above or we may go down and retest the lows again.

Much going on this week in Europe and while we begin Earnings season with Alcoa reporting its earnings, Europe may take center stage over any news here.

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Anonymous Anonymous said...

With the way that things have been playing out, I seriously doubt that we will be dropping very much at all.

oil is another market that is way out of wack! to the upside.

where the economy now is, regular gasoline should be selling in the upper $2 range.

4:26 PM  
Anonymous Anonymous said...

The DOW has been having an unbelieveable run. How can this be?
The economy is in no way great. Some will say that it is not even good!
How can the DOW be trading in the 12,500 range?
What if the economy continues to gain momentum up? will the market continue up? if it does, how high can it go? 14,000?
This has been one very strange year, regarding the stock market and what it has been confusingly doing.

6:33 PM  
Anonymous Anonymous said...

There has been close to ten days that have passed since this post was written. What are your thoughts to where we are headed, regarding the direction and distance to the DOW? Greece seems to be in the spotlight now. Besides that, the only other talking point seems to be the calamity between the Republican candidates.

5:53 AM  

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