Dow at 8000
By Colin Twiggs
January 22, 2009 7:00 p.m. ET (11:00 a.m. AET)
These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.
Dow Jones Industrial Average
The Dow is testing support at 8000, with rising volume indicating buying pressure. Respect would signal another test of 9000, while failure would warn of a primary down-swing. In the longer term, expect further support at the November low of 7500; but the target is 6000: 7500 - ( 9000 - 7500 ).
Gold
Spot gold is headed for another test of $900, close to the upper border of the long-term descending wedge formation, and resistance is likey to be stronger. Breakout would signal the start of a new (primary) up-trend — but wait for confirmation from a retracement that respects the new support level ($900). Failure to breach resistance remains as likely, however, and would signal another test of support at $800.
Source: Netdania
Crude Oil
West Texas Crude is headed for another test of resistance at $50/barrel. Shrinking global demand is likely to lead to retracement to test support at $35. Failure of support would offer a target of the 2003 low of $20/$25, calculated as 35 - (50 - 35).
Source: Netdania
Currencies
Euro
The euro is retracing to test support at $1.25. Failure would offer a target of $1.00 as shown on the monthly chart below, and calculated as 1.25 - ( 1.50 - 1.25 ). The primary trend is uncertain and respect of support would signal another test of $1.45/$1.50.
Source: Netdania
Japanese Yen
The dollar continues in a primary down-trend against the yen, headed for a test of the 1995 low of 80.
Source: Netdania
Australian Dollar
The Australian dollar is retracing for another test of support at $0.60. Failure would offer a target of $0.50, while respect of $0.60 would be a bullish sign.
Source: Netdania
If a man is proud of his wealth, he should not be praised until it is known how he employs it.
~ Socrates