Friday, May 8, 2009

What if this rally has some legs!

Dow Jones Industrial Average:(Please click on the picture to zoom in)

Some of my readers have been asking me why I don't give any optimistic analysis, so I honored their requests. Note that I'm not bullish by no measure,but it's smart to be open to the rare events as Nassim Taleb said in his book "Black Swan".
You might be familiar with inverted head & shoulders pattern, but just in case I will explain it to you.
Inverted Head & Shoulders' the target would be the distance between the neck line (in white) and head (circled in blue). Which give us the maximum target of 9800 to 10200 for Dow Jones.
************* PAY ATTENTION ************** If Dow stays above the neck line ("in white") and then it moves above 200SMA, I-H&S pattern could come to play. The failure to move above 200SMA will cause the Dow Jones Industrial Average moves lower to retest the March low . Please see my post "S&P500 Possible Moves in May ".