Hello everyone, watching the current market price action is like watching grass grow or paint dry. Granted, we have had a nice and painfully slow upward movement in prices but keep in mind folks we are still showing a lot of bearish divergence and other indicators are also saying its time for a pullback…does this mean a pullback will occur right away? No, it doesn’t but you should be very careful we we end these last 2 trading weeks of the year as you set your goals for 2011…I personally believe the risk of a larger move currently is to the downside but should that move find solid support at one of the levels I have outlined previously, then I will look to go long….should it keep dropping a few shorts will then be the order of the day…folks, always remember you should be following the market, not guessing which way it will go next.
Looking that the Daily Chart of the Dow below you can see how it is moved up very nicely to our upside measuring objective of 11,600 and has now run into road blocks. The Dow could not hold onto the 11,600 level into the close but it did hit the number. Again, same with the S&P 500 the Dow is showing a W5 up which indicates a possible directional change in price movement. In the chart I have highlighted possible support should the Dow move down.
Please have a safe and enjoyable New Years!
Trade Smart — Not Often