The Sunny Side of the Street
Figure 1- INDU Daily
On Thursday last, I expected to have somewhat of an up-day, all else being equal. Instead, we got another sideways day with the Dow plodding along to finally end down about 55 points and the QQQ down 30 cents. Most of the points lost were done so on the opening drop, leaving the remainder of the day to bounce up and down. I was looking for the Dow to move above 8233 on Friday or the first two days of this coming week, but the Attractor at 8169 seems to be holding any movement from happening in either direction.
The Attractor at 8169 is formed by several areas of congestion, and pennants drawn by my Pennant Finder indicator. You can see these blue triangular formations in Figure 2.
Figure 2- INDU 15-minute
I am now looking for the markets to begin the week with more downside activity, with the Dow heading for 8035 where there is a line of support formed not only by pennant tops and bottoms, but by the location of my Dynamic Moving Average currently.
Figure 3- QQQ 1-minute
The RSI on the daily charts is turned down from the bullish boundary and has 20 more points or so to move down before it would take a natural, cyclical bounce upward. So, on the big picture, it would be likely for the markets to spend a couple of days moving downward to take the RSI back into bearish territory.
On the intraday (15-minute) charts, the RSI is already at the natural lows in the 40 zone and is positioned to take a bounce upward. This puts the daily and the intraday charts in opposition, which often ends in moves that are choppy and sideways.
Much of the movement in the recent markets has been found in a single bar drop, or rise, with the remainder of the day being just choppy and sideways. One big bar followed by a bunch of little ones seems to be the pattern.
With that in mind, it would make sense for tomorrow to be a quick drop to 8035 on the Dow with the rest of the day, or even the remainder of the week, just dribbling around that line.
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