Dow technical outlook – negative cross over

The DOW weekly had the expected negative cross over of the 50 week through the 200 week. This bearish signal has usually triggered substantial sell-offs over the next months. The first implication though is a counter trend move interestingly. The market might have found its expected low for this week today and being held up for the remainder of the week in order to keep up the put writers value. We also entered a 9 count on daily basis, which usually bears a support in this case short-term. The odds are very frankly requiring a test of the 2002 lows near term (this year) as the monthly count signals that this month might be a consolidation month and Hedge Fund wait for better prices to liquidate. In December, we will see another round of rate cuts to bolster the market and funds will try to lift the market towards end of the year anyway. It’s hard to say how successful they might be depends on technical aspects as how much time Hedge Funds have to liquidate as they want to save the day by lifting markets as well in December, I can imagine.

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~ by behindthematrix on November 19, 2008.

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