trendmagic
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Dow Jones Proprietary Indicator: LONG
We pointed out earlier in the week that the $NYSE was the first index to break out and that the other majors would follow. On Friday, the NYSE continued its breakout and accelerated to the upside, closing above the July 3 highs. The DOW broke above its downtrend channel from the top and confirmed its breakout and confirmed what our indicator has been saying from the exact day we called the bottom. Expect more strength in this index. The $NYSE could go and challenge the May highs. The DOW's next point of resistance is the 11300 area and we expect that to be taken out with ease. The market is a bit overbought so we could have a bit of backfilling here. Short term setbacks aside, this market is going to make its way higher. 11500 should be the next stop after 11300.
NASDAQ is the index we are keeping a close eye on. It is going to help us identify how strong this rally really is. Traditionally, the high tech speculative stocks lead a major market advance. We have not seen this up to date. There has been a rotation into large cap stocks, or a flight to quality. This is the first time we have seen this since the 2003 bottom, this is a change in character and one of the primary reasons we think this market will go lower into the October bottom. Howeer, we will ride this bull for all its worth before we change our posture and go short this market. The 2100 area on the $COMP is going to be critical. We want to see how the area is broken....that could help us gauge how strong this market is.
We are keeping a close eye on KLAC for a potential buy signal. Along with the rest of the Semiconductors, this stock has been hammered. Our PNF target analysis called for a bottom at the 38 area but we got 39. Thats close enough for us. This stock looks to have put in a substantial bottom and has been building "cause" or more basically, traders are accumulating this stock. Volume patterns look good during this rangebound period and we look to be set up for a breakout if the 42.60 area can be taken with some conviction. Our PNF box counts suggest a move as high as 54. We'll take it step by step.
We pointed out earlier in the week that the $NYSE was the first index to break out and that the other majors would follow. On Friday, the NYSE continued its breakout and accelerated to the upside, closing above the July 3 highs. The DOW broke above its downtrend channel from the top and confirmed its breakout and confirmed what our indicator has been saying from the exact day we called the bottom. Expect more strength in this index. The $NYSE could go and challenge the May highs. The DOW's next point of resistance is the 11300 area and we expect that to be taken out with ease. The market is a bit overbought so we could have a bit of backfilling here. Short term setbacks aside, this market is going to make its way higher. 11500 should be the next stop after 11300.
NASDAQ is the index we are keeping a close eye on. It is going to help us identify how strong this rally really is. Traditionally, the high tech speculative stocks lead a major market advance. We have not seen this up to date. There has been a rotation into large cap stocks, or a flight to quality. This is the first time we have seen this since the 2003 bottom, this is a change in character and one of the primary reasons we think this market will go lower into the October bottom. Howeer, we will ride this bull for all its worth before we change our posture and go short this market. The 2100 area on the $COMP is going to be critical. We want to see how the area is broken....that could help us gauge how strong this market is.
We are keeping a close eye on KLAC for a potential buy signal. Along with the rest of the Semiconductors, this stock has been hammered. Our PNF target analysis called for a bottom at the 38 area but we got 39. Thats close enough for us. This stock looks to have put in a substantial bottom and has been building "cause" or more basically, traders are accumulating this stock. Volume patterns look good during this rangebound period and we look to be set up for a breakout if the 42.60 area can be taken with some conviction. Our PNF box counts suggest a move as high as 54. We'll take it step by step.