The Dow Jones ended the week only 13 points below long term moving average of 150 days, currently located with 10.393 points. This 150-day moving average was used as support during the recess area earlier in the month of February, then this area is very significant support for the index. I often mentioned that a long-term moving average, a 150 or 200 days a tie between a bear market to a bull market and acted as a kind of tipping point for determining the trend of stock markets . The body of the candle on May 7, the solid part of the candle almost finished on the MM 150 days, while the lower shadow, the wick of the candle has almost touched the 200 day moving average.
These two moving averages are very revealing existing strengths of Dow Jones, a rebound on the support area of the moving average of 150 days is a possibility. But the footprint of the bearish last week is so heavy technically and psychologically speaking, I doubt the quality and sustainability of the rebound short term if it occurs, caution is advised.
The fracture of the moving average of 200 days if this occurs, represent the continuity of the downward movement and guide the direction of Dow Jones the hollow area located anterior to 9.835 points And thus build a structure of type "double dip short term" .
These two moving averages are very revealing existing strengths of Dow Jones, a rebound on the support area of the moving average of 150 days is a possibility. But the footprint of the bearish last week is so heavy technically and psychologically speaking, I doubt the quality and sustainability of the rebound short term if it occurs, caution is advised.
The fracture of the moving average of 200 days if this occurs, represent the continuity of the downward movement and guide the direction of Dow Jones the hollow area located anterior to 9.835 points And thus build a structure of type "double dip short term" .
The second graph is period week, we just note that when the Dow exited through his lower corridor of fluctuation in which bull he had been for three months It was in a position of potential weakness. And breakage of the support area of 10.988 points, the downward movement fell under acceleration, but nobody could foresee a historic fall of this magnitude in such a short time, 997 points free fall in the depths of the storm last Thursday . By cons, once an important and significant support area is broken down by, a process of disengagement long positions should begin , support areas are still office STOP protection. So in today, Tuesday or Wednesday you were conveniently already out of the market or at least your positions were oriented to take advantage of the potential decrease in the making ...
Still on the chart week, voi well as the Dow came bumping into resistance zone Fibonacci 38.2% last week. And if the 200 day moving average is screwed by down, it will also represent the fracture zone of 50% fibo is located above the MM 200 days. Very often after a break important, a security or index has a high probability of returning to the area of Fibonacci 50% and then falling back in bearish mode thereafter. In the case of Dow Jones, the Fibonacci zone of 50% was smashed up by early March and the upward force has pushed the index up to the next fibo resistance area, which is the 38.2%.
What I want to express is that if the 200 day moving average is broken down by significantly shorten this index below the diagonal line resistance red and it could be a type structure bearish "Bull Trap" which would be built over the past 10 weeks , the blue square on the graph. So for this reason, moving averages of 150 and 200 days are to be observed with great attention and then the potential area of "double dip" located 9.835 points.
In today strongly rebounding stock market, otherwise a second three-year bear market is upon us ...
previous analysis
http://observateurtechniqueindices.blogspot.com/2010/05/dow-jones-une-baisse-historique.html
http://observateurtechniqueindices.blogspot.com/2010/05/dow-jones-4 mai.html-
Posted by Claude Bordeleau
Still on the chart week, voi well as the Dow came bumping into resistance zone Fibonacci 38.2% last week. And if the 200 day moving average is screwed by down, it will also represent the fracture zone of 50% fibo is located above the MM 200 days. Very often after a break important, a security or index has a high probability of returning to the area of Fibonacci 50% and then falling back in bearish mode thereafter. In the case of Dow Jones, the Fibonacci zone of 50% was smashed up by early March and the upward force has pushed the index up to the next fibo resistance area, which is the 38.2%.
What I want to express is that if the 200 day moving average is broken down by significantly shorten this index below the diagonal line resistance red and it could be a type structure bearish "Bull Trap" which would be built over the past 10 weeks , the blue square on the graph. So for this reason, moving averages of 150 and 200 days are to be observed with great attention and then the potential area of "double dip" located 9.835 points.
In today strongly rebounding stock market, otherwise a second three-year bear market is upon us ...
previous analysis
http://observateurtechniqueindices.blogspot.com/2010/05/dow-jones-une-baisse-historique.html
http://observateurtechniqueindices.blogspot.com/2010/05/dow-jones-4 mai.html-
Posted by Claude Bordeleau
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