7 Jan 2013

Markets was flat today its like watching grass grow.  The past few days have been research time for me.  So going back to technical analysis lets look at the possibility for the new few days, weeks and months ahead.

Looking back at the Dow Jones 1900- present we can see a trend that has been holding up since the bottom of 1932.  This is a pretty large support channel.  If we break down as a probability in the year 2013 we can see that there area of 7860 is the lower BB.  The worst case scenario is the 200MA which is also hugging the lower Trend Channel line at 4535.  Of course these numbers will change as we move up in time.

This chart also shows a stochastic that has crossed but not out of the overbought situation. For the Quarterly Stoch. to push down, the Monthly will have to do the work to push it down and for that to happen the Weekly chart "must" turn.  All time frame must work with each other and this is the way to use time frames for analysis.  We are already in overbought situation with the weekly SPX and the DOW still has to catch up.  First clue will be when it crosses down and my rule is that if the weekly moves it will move for weeks or months..

 

 

Our Daily Stoch. have been showing an eagerness to turn down for SPX.  We need strong momentum down for the Daily to push the Weekly down from its position.