Click chart to enlarge This is the only chart you need right now. If the Dow decisively breaks and closes below the support line drawn above, load up on DXD and just have patience. The closer it gets to the 200dma, the more likely it is to break down on its next test of support.
Bottom line... the 200dma for the Dow is at 12470. Still too lofty considering the economic mess we're in. We'll break the 200dma and launch a new bull market once the 200dma comes down to a reasonable level (high 11,000?). In the meantime, the closer we get to it, the greater the potential energy for a breakdown. Just watch the line and don't be afraid to bet against the market if it breaks.
7 comments:
Snot: Are you expecting oil will rebound in a few days and run for a lower high if not new high? Thanks!
High 11,000 on the Dow 200dma may coincide with the real estate, employment and inflation issues finally turning around. Or at least 2 out of 3. In another year maybe?
My own TA told me that yesterday the DOW began its initial phase of the technical breakdown. It may rally once more, but it will not rally past 11900. Then it will fall and breaking through the line you have on your chart. I am setting my sights on 11900 as a good buy point for DXD.
I agree with you snot on the overall market and will be watching for the break. MY awful RIO stock may have hit a bottom....or not. It may continue to move down with the rest of commodities however it is about $26 now. $17 is the 52 week low and this company has maintained great earnings. You guys might want to put that on your watch list as we are almost 50% off this years high. Following that same line of thought I just bought some XTO and I am thinking CNX looks attractively priced. Now I knoe this is opposite of the SNOT trend trading thing...however it is energy, coal gas and oil....my friends it is not going to go down that much more. both are down almost 50% and you and I both know that given a bit of time the whole energy thing is going to rear it's ugly head again and become a crisis. There is no way around it unless we are truly slipping into the great deppression. Just my opinion give it some thought.
I think we are near the breakdown because the VIX is now 19 .8 and the last fall down was with a vix of 17.5 on may.I am beting that this time the vix, that will trigger the downside, will be 19 or 18.5.
I think we are near the breakdown because the VIX is now 19 .8 and the last fall down was with a vix of 17.5 on may.I am beting that this time the vix, that will trigger the downside, will be 19 or 18.5.
Snot,
Why do the AG names go up when the market goes down? Seems like they should be taking more of a beating. and what if we do get the next leg down in the dow. Will AG come back?
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