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BSNBC

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BSNBC's Blog : stock market and 1929-2930

July 31, 2009

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TickerBandit Date

July 31, 2009 17:42 Abuse this post

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http://image.minyanville.com/assets/FCK_May2009/File/Theal/0709/theal1929.png">

TickerBandit Date

July 31, 2009 23:32 Edited: July 31, 2009 by TickerBandit Abuse this post

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BSNBC,

Check out the current Weekly Chart of the DIA. We have two consecutive weekly closes above the neckline of a textbook inverse head and shoulders pattern. Presently, the DIA is attempting to regain the trendline which supported the March thru June rally. It is unclear whether it will steer prices or be broken by them. If the market can break above this trendline, then it should be support for whatever rally follows.

I put retracements on the chart also. The retracement of the 1929-1930 bear market rally exceeded 50%. I don't think we get a full 50% from this rally but I do notice that it is presently a little above the 20 month SMA which is at 10,200 but should be hanging in about 10,000 in August. 10,000 is not out of the question if history is to be the guide. But then the market will do what it will. Trend failure should be paid attention to. We have a channel now to judge the health of the rally so I think that one should not hold in adverse movement which violates that channel's lower trend-line.

There could still be playable rally left and a full 50% retracement is possible. That's around 10,400 DJIA where there is also a gap in the weekly charts (just a mention to those bears who mind gaps).

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