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.
- Point 1. Tenkan sen is still trending down and beginning to flatten (signalling that short term it isn’t going anywhere)
- Point 2. Kijun sen is still trending down and DOW has not breakout of this resistant
- 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.