Steppin’ back to basics…
We just had a 2 week short-term uptrend, which has interrupted an intermediate several month-old downtrend. Will the ‘Up’ overcome the aging ‘Down’, or will the larger trend prevail?
The advance occurred on mixed sentiment and with a lot of skepticism, which is bullish. The down trend is getting a bit old and extended. On the other hand, the rally contains overlaps and looks corrective. Which one will it be?
Mr. Market is working hard to give us an answer. The DOW is now facing resistance from – and is challenging – the down trendline on the daily, which was active since March. In a simple way, a break of the 2 week-old lower support line would be needed for a breakdown.
For my $$ and cents, until a trend becomes a little more obvious, which should happen soon, it may not be a good time for large unhedged positions.
FWIW, on the hourly DOW, the MACD has formed a bearish divergence and it is overbought. Hourly ADX is neutral on the DOW, and getting low on the flatter-acting NDX. |
