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June 8, 2009 / Jeb

Stock Market Update. Important Week for DOW. 6-6-09

dia 6-7-09

Major resistance is being approached for the DOW.  Notice the trendline and resistance where it failed three times in December of 08.  Overhead resistance and lack of volume on the recent rally tells us to be careful and to be ready for a shorting opportunity.  Stay Tuned!  Make sure you have trailing stops set up.

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4 Comments

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  1. Tuni Singh / Jun 9 2009 4:42 pm

    Jeb-you must have read my mind-I was looking at the DJI chart and saw how tight the price movement has been and declining volume-I was just getting ready to email you about that.

    I know when a rubberband is wound so tight it has to spring one way or the other-the dow is in such tight range it has to spring one way or other-so with volume going down-you think it is to the down side?

  2. Anticipate Opportunities / Jun 9 2009 5:23 pm

    Technical Analysis says that volume should confirm price. It is obvious that is not the case highlighted by the chart.

  3. Tuni Singh / Jun 9 2009 5:39 pm

    Yes but that chart does not appear to include the last 4 or 5 trading sessions. This week price movement has been miniscule-that is what I mean by price being so tight. In the last seven trading sessions the dow has gone between 8635 and 8824-closing at 8763 or 8764 for the last three days in a row and on declining/stable volume. Is that not a little unusual-what does that mean? If price is range bound and very tight and volume is low but consistent meaning not so much different than the days before-to me that means the market may be getting ready to make a big move one way or the other. It is making that weird star high low close today- meaning that big move could come tomorrow-what do you think? My “uncomfortable” feeling comes from the tightness of price in the last seven trading sessions esp the last three.

    • Anticipate Opportunities / Jun 9 2009 8:08 pm

      Good point and that is why in the post I mentioned to be careful as DIA is approaching resistance and the rally has been on light volume. Volume will direct this market either way.

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