Trading Ichimoku

All major indices rally yesterday.

Just last week, I posted a Weekly Chart reading on DOW.

In the post, Ichimoku identified 8011 as possible resistant levels.

Here, I am going to show how it shows up on the Daily Chart.

Firstly, noticed how the Weekly Chart resistant translate to the kumo resistant on the  Daily Chart?

On the daily, candle has pierce through 7942 resistant.

At this moment, the kumo still has not twist to show that a convincing upward trend has started.

However, we do have a signal from Tenkan sen crossing Kijun sen.

We may see DOW retracing a bit after such a great run. And it may trade inside the kumo; a trendless state.

The blue arrows are there to highlight the resistant from Chikou Span on the Daily chart. And yesterday’s close has pierce through it a bit. 

The great thing we can see here is DOW has recaptured the lost ground in the Feb selloff.

8011 continue to be a level that I will be monitoring closely.

I have also close off my short positions and started placing small probes on some long counters.

With the recent rally, it is easy to find many news articles declaring that the market has bottom and it is all the way up.

But, it wasn’t that long ago when Obama was sworn in that we have such similar feeling.

Let’s go back to some fundamentals and let the charts tells us the story.

Here, we are going to examine DOW’s weekly chart.

3 things that shows the trend is still down (look at the respective points on the chart.

1. Point 1. Tenkan sen is still trending down and beginning to flatten (signalling that short term it isn’t going anywhere)
2. Point 2. Kijun sen is still trending down and DOW has not breakout of this resistant
3. Point 3. The forward kumo shows that it is still trending down. With such a huge drop in recent days, what has change that can all of a sudden change the economy? Are banks going to lend money like back in 2007?

Moving forward, we see a fairly strong resistant at 8011 levels identified by the Chikou Span. Even if DOW manage to rally to this level, I doubt it will be able to break through this level.