Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

SPX and INDU: Are the Bulls Bored Yet?

By

The Dow Jones Industrial Average has now reached the target zone of January 3, but as yet there are no signs of a turn.

PrintPRINT
Yesterday, the Dow Jones Industrial Average (INDEXDJX:.DJI) effectively reached my target of January 3. The preferred and alternate intermediate counts are still both bullish -- though there's one small bear hope still remaining (an ending diagonal, not shown) since the key long-term pivots haven't been crossed yet. Bears would basically have to turn the market more or less immediately in order to pull out a stunning upset, but currently that appears to be low probability.

As it turns out, my observation on October 8, 2012 of a three-wave rally into the 2012 high, and subsequent expectation that the market would make new highs after the correction, proved to be accurate.


Click to enlarge

The long-term chart of INDU notes the next resistance levels. If bulls can keep pushing a bit farther, they give themselves a shot to run toward the black dashed median line, and potentially as high as the top of the black channel.


Click to enlarge



Still no material change in the S&P 500 (INDEXSP:INX), though I presently have some slight concern about the rally from the 1470s being part of an extended fifth wave (black alt: 3 and 4), and INDU has now been added to the markets which have reached my targets, so I continue to feel it's prudent to protect profits. Beyond that, the market is starting to lull all of us into a bullish stupor -- and when complacency sets in, the market becomes ripe for unexpected corrections. The blue trend lines would be the first warnings.


Click to enlarge

I also still feel that the Philadelphia Bank Index (INDEXDJX:BKX) may provide some clues to the short-term and whether or not to expect a larger correction in the near future.


Click to enlarge

In conclusion, the market is still within a third wave rally, so until it gives some signs of a turn, there's nothing to do but continue to ride the trend. Trade safe.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE