DOW monthly update

The DOW has reached the pattern target of 12800 and challenged the trend resistance around 12600 but reversed lower on a weekly level. The immediate pullback is back to 11800-12000 the next 2 weeks as an initial move. The complicating factor right now is the inter market divergence which gives Tech more upside overall. As the Dow has reached a weekly count 9 (setup) the NDX is just at a week 4 count. Furthermore the NDX is producing new ( relative highs for the last 10 years but not in absolute terms and 2000 levels). Hence the monthly chart of the NDX is pointing clearly to more upside. The DOW can not easily go above 12850 for the time being as the sentiment snow bullish ( not extremely) and a pullback has already started and will bring initially a 1000 point drop. Thereafter the NDX will climb very likely to new highs with SPX and DOW best case retesting current highs. A very important indication is that with the DOW the VIX and VXO have made 9 week counts to levels which easily have the level to serve as lows around 16.  My assumption is that DOW and SPX will entered wave 1 down but the NDX will make new highs after the imminent correction before joining the party. One strong indicator is my favorite long AAPL which is after the last earnings blow out really cheap plus they have 100 bil in cash ( they need to start a Hedge Fund or start to pay dividends). Or buy Greece and get themselves a 0 tax break as the new rulers of the old empire.

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~ by behindthematrix on January 30, 2012.

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