I charted the Dow Jones Industrial Average (DJIA, $INDU, $DJI) after the index closed for the month on 7/30/10 at 10,465.94.
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The Dow Jones was stopped once again at the top of its trading channel (strike one). The index made a solid attempt to climb above its 100 day moving
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I charted the Dow Jones Industrial Average (DJIA, $INDU, $DJI) after the index closed for the month on 7/30/10 at 10,465.94.
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The Dow Jones was stopped once again at the top of its trading channel (strike one). The index made a solid attempt to climb above its 100 day moving average (dma) after cresting its 200 dma, but couldn’t get a full day above the 100 day line before retreating (strike two). That lead to an intraday break of the 200 dma again, twice (strike three?). Although the index hasn’t closed below its 200 dma for the past six days those intraday breaks can be a hint of what’s to come.
The 50 day moving average is around 275 points lower and could be an area of support for the DJIA. The 50 dma has brief support and resistance in the past six months, but the trading channel might have too much of a pull to the downside to let the moving average have much influence. While waiting to see if the 50 dma pulls out some power there’s a short trend line worth watching. It’s only been around since the beginning of July, but for now it’s the best trend line for the bulls I could find.
Another somewhat bullish indicator comes from Williams %R. It’s not that %R is calling for a bull run; it’s just not calling us to the exits just yet. The same might be said for volume. As I’ve pointed out during this rally already, volume has been low. The good news for the bulls is that it stayed low during the past few days that moved lower. July has been a great month by any measure, the best month in a year, but is it time to take a breather now?
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