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Little trend beating the big trend

HAVING TROUBLE PRINTING?
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The Dow Jones Industrial Average looked like it was going to cruise through the 10,900 level on its way to 11,000, but 10,900 is proving to be tough resistance. The Dow has failed to break this level the last two days, but perhaps the third time is the charm.

Dow Jones Daily Chart

The 1,300+ point run up in April has been impressive, but now prices are being squeezed between trend lines. When the Dow pops, which way will it go? Odds would favor the 15-month downtrend being able to overpower the short, steep up trend. The downtrend also has the added strength of a previous high and a stochastic that has been overbought for so long that gravity eventually has to take over. If the downtrend does win, a pull back should find its way to the 200-day moving average. If the little up trend, which is holding up well under the pressure, is victorious, 11,035 is the next upside test. Helping the up trend is financial names like American Express, JP Morgan, and Citigroup. Eastman Kodak is assisting after reporting they are making progress in their digital products and services. Operating heavy machinery while smoking cigarettes and talking on the phone is hurting the Dow, as Caterpillar, Phillip Morris, and AT&T try to drag the index lower.

Jeffrey Canavan
Assistant Analyst
www.PremierMarkets.com

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