Sunday, December 9, 2012

mini Dow (update)

This market was able to get through the ECB meeting and unemployment without any weakness.  We are continuing to see strength and I've now moved my stop up to 12904, just below the most recent swing low.  My target on my last contract remains 13288.  Friday's action saw it first new closing high since 11/23 and it looks like it really wants to test that 78.60 area.  However, I do see resistance if we get there this week.  Looking at the 240M chart the dominant ABCD pattern has a shallow retracement with 19:4 skewing, which is very bullish.  It was followed by a supporting ABCD pattern with a neutral retracement and 11:13 skewing, which is neutral.  These two patterns combined project an initial target area between 13288 and 13373.  The upper end of this area near 13373 coincides with the 78.60 retracement level along with MR1 resistance.  I would expect a correction from here, but if not the next target area would be the recent highs near 13600.

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