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Friday, January 20, 2012

Touchdown in Sight for Dow 30?

In my post on December 9th, 2011, I outlined a hypothetical scenario whereby if the Dow 30 played out over the next three days like it did on the 9th (it gained 200 points that day), we'd see the Dow reach 12800 by the close on December 14th for a "touchdown." Needless to say, it didn't work out within that time period; however, with today's close at 12720.48, that game plan is now within reach, provided it can push above a minor resistance level of 12754, as shown on the Daily chart below. The Dow has gained nearly 1000 points since the December 2011 lows. Near-term support is at 12600.


The S&P 500 has closed above 1300 for three days now, forming near-term support at this level...near-term resistance is at 1320, as shown on the Daily chart below.


The Nasdaq 100 closed above 10 year highs yesterday, but pulled back and closed just below 2011 highs, as shown on the Daily chart below...this 2011 high is near-term resistance at 2438.44 and near-term support is at 2400.


The Russell 2000 closed above near-term support of 780, but closed just below near-term resistance of 785, as shown on the Daily chart below...the next resistance level sits at 810.


The Dow Transports closed just below near-term resistance of 5300, as shown on the Daily chart below. Near-term support is at 5200.


The Dow Utilities bounced and closed up from near-term support at 445.00, after breaking below prior support at 455.00, as shown on the Daily chart below. This is a chart to keep an eye on to see whether it can rally above near-term resistance at 450.00, and, if so, whether we see all three Dow Indices move up in tandem next week...which could provide the Dow 30 with the stimulus to reach the 12800 level, as mentioned above.


Each candle on the chartgrid below of the YM, ES, NQ & TF represents a one-month Options Expiry period, and the current candle closed today. Upside targets for the next OPEX candle are the top Bollinger Bands at 13056, 1390, 2546, and 877, respectively. Near-term support levels are the mid-Bollinger Bands at 11510, 1220, 2181, and 735, respectively. This last candle advanced on considerably lower volumes, so any meaningful and continued move to the upside should be verified by higher volumes on subsequent candles.


Below is a Weekly chartgrid of the YM, ES, NQ & TF. We can see that they closed the week above near-term resistance, but did so on lower volumes than last week. However, the Bollinger Bands are widening as price nears the top band, which suggests a continuation of the rally. Near-term resistance levels are the top Bollinger Bands at 12857, 1332, 2460, and 798, respectively. Near-term support is the POC of the monthly Volume Profile for January (yellow horizontal lines) at 12437, 1286, 2360, and 759, respectively. I'd also like to see higher volumes on subsequent weekly candles in order to verify the sustainability of this latest move up.