Dow In Accumulation Mode

Dow managed another triple digit gain last night. The phase chart is indicating “Accumulation” phase with the index now above its 50 day and 200 day moving average respectively.

All eyes will be on the FED. Although the FED is widely expected to leave the rate at current levels, investors will be digesting the FOMC statement to give clues as to where the FED policy might be headed.

The trend is certainly positive at this stage and if the market can maintain its momentum, the 50 day moving average will be set to move above its 200 day moving average, giving what we call a golden cross. That will be good news for the bulls.

Dow Is Back In Bearish Phase

Market got their first big sell off after a week of gains that carry the Dow Jones Industrial Average to 10,400 level. Bears got the sell off that they were looking for on Friday with a drop of 261 points. The index is now below its 50 and 200 day average, driving the market back into “Bearish” phase as indicated in the phase chart.

Earning results gave stocks like Alcoa and Intel a good bounce. However, they were not able to hold onto their gains.

This market looks to be following the “Buy on rumors sell on news” syndrome. With the index now back in “Bearish” territory, good earnings results may not be able to drive the market higher.

Dow Commentary

The Dow Jones Industrial Average managed to close above its 200 day moving average this week. The index formed a “W” pattern on the daily chart. This bode well for the bulls. However, this pattern was formed on low volume, meaning that the market went up without the mass participation that is required to make a sustainable rally. It is likely that the market is moving up because of the lack of sellers rather than abundance of buyers.

The improvement in the market action is also shown in the daily phase. The phase chart has moved back to “Warning” phase from “Distribution” phase. This improvement cannot be taken as sign to buy into the market and investors looking to add to their positions should wait for a better entry point.

Dow Warning Signs

Market turmoil continues. Dow closed yesterday at 10,620 falling 162 points for the day. The euphoria from the €750 billion agreement by the EU and IMF more or less fizzled out.

There are signs that debt crisis in Europe will come back to haunt the market again. The EUR has weakened against the USD and it has fallen below 1.25. This is not a good sign as traders continue to sell EUR despite repeated calls from EU that they will support the Euro.

With USD at record high against the EUR, this will mean that exports from US will be less competitive and this will in turn affect earnings of US companies that derived significant business from the EUR zone.

The problems in Europe have a negative impact on the US stock market. The Dow Industrial Average is now in “Warning” phase suggesting further weakness ahead. The index dropped below its 200 day moving average 6 May and even though a rebound followed, the index is finding difficulties staying above its 50 day moving average. It looks likely that the index will test its 200 day moving average again. As of Friday, the 200 day average stood at 10,234.

Dow - Bullish In Short Term

The market is back to buying mood. The Dow Jones Industrial had a good outing on Friday moving up 122 points. It seems that the bulls are back in control with indexes making a move to the upside and breaking through resistance levels.

Market participation remains low as shown in the low volume of recent rallies. Short term indicators are turning positive however the long term technical picture has not improved much.

The phase chart for Dow Jones is now back to “Bullish” phase. The next resistance is at 10,750 level. The strategy is still to follow the trend but traders will need to be nimble and get out of the way if selling pressure resumes. The index is very likely to test it’s 200 day moving average again. The current 200 day moving average is at 9,670.

Dow In Warning Phase

Global stock market has been adversely affected by policy makers in China and US recently. China decision to go ahead with plans to curb lending to prevent economy from overheating and the proposal in US to stop banks from doing proprietary trading caused global market to stage a sharp retreat.

Dow industrial average has entered “Warning” phase with the index closing below its 200 day moving average. Since moving to “Bullish” phase, the index closed below its 200 day moving average only on 2 occasions.

The manner in which the index pierced through this support line suggests that we will be seeing further weakness. For investors who are thinking of raising their bets, I suggest that they take to the sidelines to wait for clearer signs from Mr Market before putting their money into the market.

Remember to trade with the trend and make it your best friend in 2010. Happy trading!

Dow Is In Bullish Trend

When everyone is expecting the market to correct, it proved otherwise. The head and shoulder pattern did a reversal and the Dow is back above 8700. The breakdown below 8000 points did not occur.

The phase chart is showing a “Bullish” signal for the index. The indicator moved into “Bullish” phase on 15 July and has maintained bullish stage for 3 trading days. The trend is clearly in favor of the Bulls.

Dow Industrial Average

US market closed above 9000 points last Friday. The index is now above its 50 day moving average meaning that the index is now in “Recovery” phase.

The index has stayed in “Recovery” phase for the past 3 trading days. This has been the best performance by the index since the end of Aug 08 where the index managed to stay on “Recovery” phase for 5 trading days before resuming the downtrend.

This time the recovery coincides with the “Capricorn” effect. And hopefully it will turn out to be the real recovery.

US Market

We have an incredible market recovery thanks to a potential rescue package from the US regulators. The US government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt.

A temporary ban on short selling of selected financial stocks likely added to the up move as traders cover their short position. All in, the Dow managed to rally 370 points to close at 11388.

The index is down just 0.3% this week. If not for all the effort by central banks around the world, the scenario would have been worst.

The index is still in “Bearish” territory and is resting at the 50 day moving average. Hopefully the rescue package can be approved next week to lend further support to the fragile market.

US Market

Dow ended a volatile week on Friday. The index was up above 400 points for the week.

The phase chart is showing a recovery for the Dow since it moved into “Bearish” mode on 21 May 08. It closed above the 50 day moving average for the first time in 55 trading days. The 200 day moving average is now at 12512.

It is possible that this may be a false breakout but the “Bears” will definitely be on their toes this week to see if they need to cover their positions.

Dow Update

We have another disastrous week for the US market. The Dow Jones Industrial Average was down. The index fell from a closed of 11842 last Friday to close at 11346. The index has broken the lows established on 22 Jan 2008.

What is next for the market? The picture looks gloomy. With the Federal Reserve done with cutting interest rates and possibility of increasing it to fight inflation, the catalyst will not be coming from the Fed. If we can see a crash in the prices for oil and commodities, that will spark a recovery in the stock market. But “Hope” doesn’t bring in the money. It is safer to trade with the trend.

The phase chart is showing a Bearish bias towards the market.


The index moved into “Bearish” phase on 21 May 08 and has stayed there for 27 trading days. The picture doesn’t look good for the Bulls.

Dow Update

The Dow had a better showing in April compared to March. The index was up 558 points for the month of April, an increase of 4.5%. On Friday, Dow managed to close above 13000 points since early Jan 2008. The job numbers released on Friday showed 20,000 job losses in April compared to 81,000 in March. The unemployment rate dropped to 5 percent compared from 5.1 percent. The job losses were not as bad as market expected and the market managed to clear its 200 day moving average.

The market certainly looks brighter from the phase chart. It has managed to move to “Accumulation” phase for the first time in 2008.


It will be interesting to see whether this show of strength will continue in the month of May.

DOW Phase Analysis

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	13043.95996	-2	13367.72852	13360.86133
1/3/2008	13056.71973	-3	13357.52246	13364.70508
1/4/2008	12800.17969	-3	13340	13366.46875
1/7/2008	12827.49023	-3	13323.04492	13368.2998
1/8/2008	12589.07031	-3	13301.38867	13368.83984
1/9/2008	12735.30957	-3	13279.96094	13370.1709
1/10/2008	12853.08984	-3	13259.61719	13372.4502
1/11/2008	12606.2998	-3	13235.89355	13373.98047
1/14/2008	12778.15039	-3	13212.85645	13376.12598
1/15/2008	12501.11035	-3	13191.52246	13376.86133
1/16/2008	12466.16016	-3	13168.94336	13377.28027
1/17/2008	12159.20996	-3	13141.25977	13375.52246
1/18/2008	12099.2998	-3	13110.02734	13373.36914
1/22/2008	11971.19043	-3	13083.45117	13370.4209
1/23/2008	12270.16992	-3	13063.52832	13368.92578
1/24/2008	12378.61035	-3	13050.24512	13367.9502
1/25/2008	12207.16992	-3	13034.6377	13366.5625
1/28/2008	12383.88965	-3	13016.1748	13365.71582
1/29/2008	12480.2998	-3	13001.16016	13365.05664
1/30/2008	12442.83008	-3	12987.81641	13363.66895
1/31/2008	12650.36035	-3	12977.28711	13363.05664
2/1/2008	12743.19043	-3	12972.98242	13362.75391
2/4/2008	12635.16016	-3	12965.4834	13361.88672
2/5/2008	12265.12988	-3	12954.80469	13358.40137
2/6/2008	12200.09961	-3	12939.18848	13354.80469
2/7/2008	12247	-3	12929.25977	13351.26953
2/8/2008	12182.12988	-3	12913.73242	13346.73047
2/11/2008	12240.00977	-3	12892.74414	13342.40234
2/12/2008	12373.41016	-3	12873.97754	13338.66504
2/13/2008	12552.24023	-3	12857.58594	13336.11133
2/14/2008	12376.98047	-3	12838.83496	13332.31543
2/15/2008	12348.20996	-3	12820.8252	13327.99609
2/19/2008	12337.21973	-3	12798.6709	13323.47461
2/20/2008	12427.25977	-3	12774.81836	13319.28906
2/21/2008	12284.2998	-3	12747.99414	13314.14453
2/22/2008	12381.01953	-3	12721.07227	13309.50488
2/25/2008	12570.21973	-3	12703.82227	13305.54297
2/26/2008	12684.91992	-3	12688.04395	13302.8916
2/27/2008	12694.28027	1	12671.57031	13299.73047
2/28/2008	12582.17969	-3	12656.41602	13295.90723
2/29/2008	12266.38965	-3	12638.40137	13290.32031

On 27 Feb 08, the DOW manages to climb out of "Bearish" phase. However, the momentum could not be sustained. On Friday, Dow closed down 315 points. The bears are still in control and it is still not easy to make money on the Buy side.

The economic picture looks gloomy and the only good news so far has been Mr Ben Bernake willingness to cut interest rate further. However with inflation creeping up, he is slowly running out of bullets to help this market.

March will be another volatile month. Trade with care!

DOW Phase Analysis

Lets take a look at Dow Jones Industrial Average.

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	13043.95996	-2	13367.72852	13360.86133
1/3/2008	13056.71973	-3	13357.52246	13364.70508
1/4/2008	12800.17969	-3	13340	13366.46875
1/7/2008	12827.49023	-3	13323.04492	13368.2998
1/8/2008	12589.07031	-3	13301.38867	13368.83984
1/9/2008	12735.30957	-3	13279.96094	13370.1709
1/10/2008	12853.08984	-3	13259.61719	13372.4502
1/11/2008	12606.2998	-3	13235.89355	13373.98047
1/14/2008	12778.15039	-3	13212.85645	13376.12598
1/15/2008	12501.11035	-3	13191.52246	13376.86133
1/16/2008	12466.16016	-3	13168.94336	13377.28027
1/17/2008	12159.20996	-3	13141.25977	13375.52246
1/18/2008	12099.2998	-3	13110.02734	13373.36914
1/22/2008	11971.19043	-3	13083.45117	13370.4209
1/23/2008	12270.16992	-3	13063.52832	13368.92578
1/24/2008	12378.61035	-3	13050.24512	13367.9502
1/25/2008	12207.16992	-3	13034.6377	13366.5625
1/28/2008	12383.88965	-3	13016.1748	13365.71582
1/29/2008	12480.2998	-3	13001.16016	13365.05664
1/30/2008	12442.83008	-3	12987.81641	13363.66895
1/31/2008	12650.36035	-3	12977.28711	13363.05664
2/1/2008	12743.19043	-3	12972.98242	13362.75391
2/4/2008	12635.16016	-3	12965.4834	13361.88672
2/5/2008	12265.12988	-3	12954.80469	13358.40137
2/6/2008	12200.09961	-3	12939.18848	13354.80469
2/7/2008	12247	-3	12929.25977	13351.26953
2/8/2008	12182.12988	-3	12913.73242	13346.73047
2/11/2008	12240.00977	-3	12892.74414	13342.40234
2/12/2008	12373.41016	-3	12873.97754	13338.66504
2/13/2008	12552.24023	-3	12857.58594	13336.11133
2/14/2008	12376.98047	-3	12838.83496	13332.31543
2/15/2008	12348.20996	-3	12820.8252	13327.99609
2/19/2008	12337.21973	-3	12798.6709	13323.47461
2/20/2008	12427.25977	-3	12774.81836	13319.28906

Similar observation. The Dow went into "Bearish Phase" on 3 Jan 08. Few days earlier than STI. It was in "Distribution Phase" before that. We are now 33 days in Bearish mode.