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Chart of the Week: Dow Jones Trading Range

After the recent run up, the Dow has been rangebound. This present consolidation represents a way for the market to catch its breate and reload afte rthe big move since the May bottom.

While I'd expect a little retracement and or back anbd filling, I suspect too many other people are hoping for that to happen. Therefore, wait until this range is resolved in either direction before putting too much money to work.

Chart of the Week:  Dow Jones Trading Range
click for larger chart

I plan to buy the breakout above 10,610 on a closing basis or if we drop below 10,400, then find an appropriate retracement (Fibonacci?)

I am watching the other major indices -- Nasdaq and SPX -- for confirmation. Its also worthwhile to keep an eye on the Dow Transports, given yesterday's Baltic Dry Freight Index.

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Thursday, June 16, 2005 | 10:36 AM | Permalink | Comments (4) | TrackBack (0)
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Comments

Barry,

We are on the same page with regard to market direction.

In a recent Market Soapbox, I commented that the NDX has declined since June 2nd, DJIA has gone nowhere since 05/18, and MID is at a new high.

Volume is too low to provide impetus or conviction in either direction. The Fed holds the key at the late June meeting, if they don't turn it with verbiage, the defense department just might with actions.

Otherwise, we drift until late August, it could be a cruel, cruel summer. $, oil, gold and commodities all going up in unison?

Caveat emptor for a commodities market implosion, prior to the bond market slaughter in late summer.

Dont bet against the dollar, be a bull or a bear, but don't be a pig, as pigs get slaughtered.

The Nattering Naybob

Posted by: The Nattering Naybob | Jun 17, 2005 9:21:01 AM