dow charts, page-11

I thought I would revisit this thread as it's been a while since my last post. ifandwhen thanks for your posts and summaries, some very good information there that is also accurate imo.

On Friday the DOW took it's third consecutive tumble only this time it has really done some irreversible short term damage imo. If we look at the charts (DAILY,WEEKLY, MONHTLY) it's not hard to see where short term sentiment is going. Incredible how 3 days can change complacency, but thats the market for you I guess.

A correction of some sort was on the cards for a while I guess. It was probably due prior to Christmas but better now than then as many would have had a more worrying holiday period if they were long and had a lot of open positions in the market. The last 3 days has basically wiped out all of the santa rally and to me it looks like there is more pain on the way. The fact that the ascending trendline from March was breached on the MONTHLY chart (on Friday night) is really concerning given it has held the index value up for the last 10 months.

Also worth noting is the WEEKLY stochastic has crossed down out of the overbought area for the first time since July perhaps hinting that the correction is not over. There is a trendline coming through the weekly stoch which looks likely to be hit before it reverses imo. To me this is the best source to rely on as it has proven to be reliable in the past. Coincidentally it also lines up (approx) with the 195EMA on the DAILY chart which would see the index price back at around the 9700 mark. Another possible target is the descending trendline coming from the Oct07 highs (green line on the weekly chart) Will it drop that far? Well that is the question but if you look at the Hang Seng the price hit the 195EMA on Friday and seemed to be in a real hurry to do so (last chart at the bottom).

DAILY with DAILY slow stochastic
- The first target imo is the yellow trend line sitting under the current price.



WEEKLY with WEEKLY slow stochastic
- target on the stoch trendline?



MONTHLY chart



HANG SENG DAILY chart with DAILY slow stochastic