Dow Being Strongly Supported

Dow managed to recoup half of its opening losses to close at 12721 on Monday for only a 0.8% loss and was able to stay above the lower resistance line.

 

Dow was also managed to stay above its previous low of 12573. The intra-day low stopped at 12583. The US market was desperately being supported by those holding a lot of money and don't know what to do with the money. Don't forget that more money can be printed out of thin air under QE3 that has been waiting at the sideline.

The run up since early June may develop into a bullish uptrend a-b-c-d-e corrective wave (ii) as shown below. I have rated the possibility as slim, but if Dow really can hold above the lower trend line and can proceed to break the upper trend line, I will have to reassess Option 1 and 2.

In stock, anything can happen, that is why the market can exist.

Dow at the close of Tuesday trading

Dow closed its Tuesday trading at 12617, down 104 points (-0.82%). It is interesting to note that its intra-day low stopped exactly on the lower trend line and its closing price stayed above its previous low of 12573. Wednesday trading can be interesting.

A big negative factor is the 10-year bond yield which has set a new low at 1.404%. Will Dow move in the same direction?



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