Tuesday, May 20, 2008

Technical Analysis Of The Dow



I just wanted to post a few technical comments about the Dow Jones Industrial Average.

In the above chart of the dow, notice the double top formation that has taken place at the 200 day moving average. I consider that very significant and am now turning cautious on the dow.

The fact that the dow closed below its trend line is also of significance and in my opinion suggests that stocks may move sideways to lower. I'm not turning bearish on stocks, but if I was long the dow, I'd either tighten up my protective trailing stops or take some money off the table and wait for things to turn a little bit more bullish.

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