The following chart is technical analysis for the Dow Jones Industrial Average ( DJIA ) and for the stock market 11/3/08. Next week will be huge for the stock market as we have the Election on November 4th, 2008, and we have the Employment Report & Unemployment Rate for October which will be released Friday, November 7th, 2008. This data is expected to be very bad. These two events will have a major impact on the stock market for weeks and months to come.
Here is my opinion on the current technical aspects of the Dow Jones. Click the chart for a visual.
The Dow Jones has managed to break through a key resistance of 9284.55 on Friday. A case could be made that the bottom on the Dow Jones has been made on October 10th of 7773.71....and that we've had two successful retests of that low, 8197.67 & 8143.59 which have held. The Dow Jones has trended above the 10 day moving average for the last four days. This hasn't happened since August 2008. What would signal that we have made a true bottom would be closing above 9794.37, the next true resistance level. I think we would get another 500-600 point rally just on this event alone. This would take us right back up to the level we closed at on the Friday that the bailout package passed which started this whole downturn. So if you are a chart watcher, watch 9794.37 closely. As for the Nasdaq QQQQ stock, when it broke $30.25, I was almost positive we would get this pop in the stock market last week. This was a strong signal that the trend was changing. Knowing that the trend was changing, this allowed me to find one of the most beaten up stocks that was ripe for a huge reversal, Las Vegas Sands ( LVS ). LVS will be an active stock to trade for weeks to come.
Watch 9794.37 closely!
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