Technicals | Oct 11 2012
By Rudi Filapek-Vandyck
It would appear that three consecutive days of weakness has altered the immediate outlook for US equity markets. At least, that's the view of technical market analysts at Barclays in London.
According to their analysis, the Dow Industrials (DJIA) has now carved out a so-called "double top" on price charts and this is usually a signal of more weakness forthcoming. Within this context, observe on the chart below how the last time this happened, in April this year, the market weakened first, made another attempt to rally higher and only then gave in to more weakness.
But hey, here we are, ten months later, and we're at higher levels experiencing that same "double top" feeling.
Underlying, argues the team at Barclays, the trend is still up. It's just that, for now, more weakness should be expected. In technical lingo this becomes: "short term top inside a larger term uptrend".
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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