Technicals | Jun 11 2010
By Rudi Filapek-Vandyck
Sometimes observing the market closely provides investors with all the answers they are looking for, the TechWizard reports this morning.
He says it has become clear this week that US equities found solid support at levels that keep the bears in their caves for a little longer. Focusing on the Dow Jones Industrial Average, the TechWizard says the DJIA clearly found strong support in the 9800-10,000 region.
This now should form the platform for a rally, he adds.
Investors should keep a close eye on two critical DJIA levels, reports the Wizard: 9900 and 10350. If the average manages to close below the first level or above the second level on a weekly closing basis this will prove a key signal for the direction forward.
As the Wizard now thinks the bulls have taken charge again, he will be closely watching whether DJIA can close above the second level tonight.
Note that the Wizard's short term positivism is offset by his longer term pessimism. At present, the Wizard believes the US market will revisit 9900 at a later stage this year and likely drop below it on a weekly closing basis.
Were DJIA to close above 10,350 on a weekly closing basis, the Wizard believes the present rally could reach as high as 10,800-11,200.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au The views expressed are the TechWizard's. not FNArena's (see our disclaimer).