As Expected – The Dow Is Defending 8,000
Jan 23rd, 2009 | By Charles Delvalle | Category: Chart of the DayBefore I go on I need to admit a bias. I think the market should tank. I really do. There is nothing in the economic news that inspires any semblance of “hope”. A rally right at this point seems short sighted and foolish. In fact, sometimes it makes me so angry that I refuse to drink any coffee at all…
I love my coffee.
But it really doesn’t matter what I think. All that matters is what the market at large does. So I’ve been seeing the possibility for a rally.
Back on January 15th (my how time flies!) I wrote about how the Dow Jones would find support around the 8,000 mark.
As expected, the Dow Jones has defended that mark ferociously over the past two weeks. Take a look at this hourly chart below…
Dow Jones Short-Term Chart
As you can see the Dow Jones was able to hold its support at 8,000 three times in the past two weeks. This, despite all the negative news that has hit the wires can be a bullish signal.
But only a move above 8,300 would confirm a rally in the Dow Jones.
As dumb as I think it is for the market to move higher, it doesn’t mean that you can’t make money off the foolishness.
But trying to make money on a short-term rally in a long-term downtrend can be tricky.
That’s why you have to be extra conservative about your entry points (that means waiting for confirmation!) and stick to your stops.
If this rally pans out, the Dow could go to 9,000 before it hits some headwinds.
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Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
