Monday, March 23, 2009

DJI Chart

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Very nice day. It looks like we witnesses what I mentioned yesterday in my "Short Technical Analysis" post:

The bullish volume during the recent recovery (March 9-18, 2009) is very strong and can cause serious correction down, unless, March 6, 2009 bottom was the last drop in the recession and now we are in the long-term recovery. In this case this bullish volume could be ignored and could indicate long term change in the stock market sentiment as it was in period from March 12 to March 21 of 2003...

It is not just about volume - many technical indicators show that the market is overbought in short-term and possible correctional move down already a week ago - see my "S&P 500 Chart" post where I alerted about possibility of short-term correction within longer-term up-trend. The today's run up is very good from longer-term trend point of view. Now, unless tomorrow we see decline, I would expect DJI to go very easy  above $8,000 - next possible sensitive level where stock market fluctuated a lot over the past couple of months (Nasdaq 100 and S&P 500 indexes have similar sensitive levels).

DJI chart

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