Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stocks Bear Market Takes a Break as Dow Targets 8,000

Stock-Markets / Stocks Bear Market Mar 12, 2009 - 05:23 PM GMT

By: Oxbury_Research

Stock-Markets Best Financial Markets Analysis ArticleWall Street breathes a temporary sigh of relief, rallying for three rare days in a row now. Capital infusion for banks, upbeat news from Citigroup of a profitable year-to-date and a General Electric credit rating cut that was less dramatic than previously anticipated have all contributed to a Dow poised to take advantage of all the money market funds sitting on the sidelines. Valuations are becoming more and more appealing to the average investor out there. The chops are indeed being licked…


Let's head to the charts. Below, I have discovered a bullish divergence. Divergences occur when the price of a security or index goes one way and the indicator(s) of choice go in the opposite direction. In this case, the Dow was trending down. I needed at least two connecting points, which we were fortunate enough to establish recently.

Next, we compared those same two endpoints with some key technical indicators. Powerful indicators such as the Relative Price Strength and Moving Average Convergence Divergence (MACD) give us plenty of bullish ammunition. As you can see, both indicators were trending up while the Dow continued to slide. The thing about divergences is that price is the lag. Eventually the price will need to shift course and reverse to match that of the indicator. And this, my friends, is why understanding divergences can be such a powerful took to add to your investment arsenal.

If the Dow shows a possible reversal, how high can we go? Well, this is a matter of watching key resistance levels closely. This means that I'll be keeping my eye on the battles that will be fought near 7,500 and 8,000. Other resistance levels above this point are useless to even touch at this point. With that said, I think there's a short window of opportunity to capture profits to the upside, but be prepared to pull gains if buying volume on the way up is lighter than the daily average over the past six months or so.

In the end, I would probably see this as nothing more than a bull rally in an overall bearish market. Even the bears need a break once in a while. If/when the tide turns back the other way, hopefully we'll be given another clear signal to act upon.

Good investing,

Stanley Barnes
Analyst, Oxbury Research

Disclosure: no positions

Oxbury Research originally formed as an underground investment club, Oxbury Publishing is comprised of a wide variety of Wall Street professionals - from equity analysts to futures floor traders – all independent thinkers and all capital market veterans.

© 2009 Copyright Oxbury Research - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Oxbury Research Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in