DOW

www.bloomberg.com/news/2013-04-23/dow-jo...ap-twitter-page.html

That drop was a bit crazy!!

The bulls are fighting back. The hammer gave an indication .


The hourly chart gave a 123 low signal earlier today.


Im planning on going short on a first attempt basis at 14762 with a 40 point stop only for today. you can see on the hourly chart the reason for this..Theres 2 levels of resistance converging, one from the trend line and the other from horizontal resistance. This is a day trade

J - as you mentioned the spx - path is getting clearer on indices and going to plan

A = 1597 - 1536 - complete
B = 1536 - ??? (in progress) .618 @ 1575
C = A @ 1574 - 1513 - to follow

all imho

good to see you back J - hope you had a nice break

B wave rally.

Some very interesting features have played out on the Dow daily chart (sorry, I've missed all the discussion so apologies if this has already been noted). Here's my daily chart:



dl.dropboxusercontent.com/u/20815047/Dowdaily19_04_13.gif

As we can see, the price has dropped out of its uptrend from 31 Dec but the RSI has dropped out of its uptrend from the Nov low and backtested it perfectly. Is this a sign of things to come? We can also see that price formed a hammer on Friday at the first support (there is a bullish RSI div on the hourly too) so a bounce may be in the offing for now and that could provide remo's trendline backtest at c. 14655.

The Dow 1 minute P&F chart has an active target at 14655 which supports this view.

It gets even more interesting when we look at the S&P. Here's the daily chart on that:



dl.dropboxusercontent.com/u/20815047/S%26P500daily19_04_13.gif

Here we see that price has already hit the trendline from the Nov low (also at the 23.6% Fib - note the RSI breakdown too) and that may have carried the Dow through to its Friday hammer. However, this has yet to backtest the Dec trendline.

Some good learning material on these indices at the moment.

CT79 wrote: Working to plan so far and looking good, enjoying this education from Remo!!

Remo, I assume you adding to your short will be at the back test of the 123 breakout at around 14537?

Ive already gone short during the day.
It is a 123 high breakout but i prefer them after a few days worth of candles .Which shows the low more clearly followed by the breakout. The one we have had is still good but i like the clear ones ,just a personal preference.
Some people may not see this one so clearly
True test of this down move comes if it can go past the 23.6 fib level(14317). Strong up trends tend to only correct to this level so one to watch.Since we have had a break of the short term trend line this should move away from this level if its a true break.
For the bulls to have a chance this needs to finish above 14650

so up above 14650....(a finish above this level would be bullish short term)
below this level this should go down.



If your not already in this then stand a side as you have missed the best trades already.
Wait for a clearer entry. Another good entry would be a back test of the trend line (14640).Obviously short there with a tight stop.