First of all, happy new year to all. May 2009 will be a good start for Wall Street and Dow Jones. My previous post was anticipating to have NO Year End Rally for 2008. Indeed, the market swung side way on the final week of 2008.
There are people arguing to be reversal or recovery on 2009, do you think so?
Let’s take a look at the Dow Jones Stock Market trends now before the Wall Street opening bell.
Sideway Market on Dow Jones
You can see from the Dow Jones chart that the market was swinging sideway for the most of Dec 2008. Though there seemed to have some slight recovery in the last 2 days of 2008, but the volume was extremely low. There isn’t enough momentum to drive the market higher.
In addition, the immediate resistance is around 8,925 – 9,000 points level. Personally, I do not think Friday closing will be higher than 9,000 points because it is Friday and I believe there are still lots of market players are still enjoying their vacation now. Volume should be picking up again possibly from next monday onwards.
Immediate support remains around 8.200 level. 20d MA is now moving very close to the 50d MA. It is very critical to watch whether there will be any moving average cross over or not next week. Plus, Obama will be resuming office in Jan. I believe there won’t be any big movement in Jan before Obama takes over white house.
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Wall Street Dow Jones Start to 2009
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Don’t feel bad about Friday’s Dow close above 9000. It probably will not hold long.
Then again, following a pending sell-off (probably beginning — and ending? — next week) delivering losses possibly approaching -10%, a robust advance could unfold.
Sideways trading over the past month is demonstrating “consolidation” of gains made off bottom on November 21st (which gains were accompanied by strong volume, indicating a “vested interest” has put a floor under the market, at least for the time being).
So, following the present consolidation the market could explode upward. First, though, this sideways action might not yet be completed. At least one more trip to the low end of the range of the past month appears in store.
Hi Tom, thanks for your great input. I think the market has hit a resistance now at 9,000 level.