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"Investing" Article
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The Dow Jones Technical Analysis

By Expert Author: Justin Blasi
View Summary | Submitted: 2007-11-30 | Word Count: 457 words | Views: 82 view(s)
Justin Blasi
The market is at a very important stage technically. If we look at a chart of the Dow Jones Industrial Average back to 1995, it is sitting below a major resistance line. We have bounced back from this line 2 times this year. As we have discussed in previous essays we expect to see a rally back to this point. It is then that the direction of the market may be determined. If we break resistance above 14,000 and it becomes support the market should create a new uptrend and 14,000 will become solid support. If we fail to break resistance for a 3rd time we may very well see Dow 12,000 again. Go to www.elitestockpicker.com to view a technical chart of the Dow

What will determine if we break resistance? There are a number of variables, but one very important factor that may very well be above all is the financial sector. Are we near the bottom of this damaged sector? It is looking as if we may be seeing some positive outlooks in this sector, but we are not speculating our capital on this high risk sector. If we do see the bottom this may very well be enough for the market to break resistance. On a valuation basis there are a number of stocks underpriced at the current market levels. We also have the global growth story, which is creating great demand every day. With these two positive bullish catalysts and the scenario of the financials hitting its bottom, should be enough for the market to break resistance. There are also small variables to consider, such as retail numbers for the holidays, consumer confidence, the price of oil, and employment growth. The Feds decision whether or not to cut rates may also have an affect in determining the bottom of the financials, and the new direction of the market. We also must consider the many signs of possible recession. Goldman Sachs upgraded defensive sectors and the price of metals are also signaling possible signs of a recession.

Bottom Line, here at Elite Trading and Speculation we are traders and we can capitalize in all market conditions. We will not speculate short term on the financials for there is very little known of how much damage has been done. If resistance is not broken we will be in a great position to add new positions at great levels for we are bullish on the long term. Market corrections are only bumps in the path to the next uptrend or bull run, and they are healthy for the market.

Happy Trading and God's Speed
Justin Blasi
About the Author/Author Bio

Founded Elite Trading and Speculation. I am a student of the markets; I research and trade the markets daily. I founded Elite Trading and Speculation to network our research and the research of our contributers.

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