Stock indexes hitting strong technical resistance

200-Day Moving Averages Pose Strong Resistance

MONDAY'S MARKET WRAP-UP

Market Snapshot for October 24, 2011 (11:20 p.m. ET):
Closing Prices: DOW 11,913.62 (+104.83, +0.89%), S&P 500 1,254.19 (+15.94, +1.29%), NASDAQ 2,699.44 (+61.98, +12.35%), Nikkei 225 8,820.29 (-23.69, -0.27), DAX 6,055.27 (+84.31, +1.41%), FTSE 5,548.06 (+59.41, +1.08%)
OIL 91.65, GOLD 1,657.40, SILVER 31.795
EURO 1.3916, YEN 76.06, BRITISH POUND 1.5995, U.S. DOLLAR INDEX 76.345

Dow Jones Industrial Average (Figure 1)

Monday's Price Action

The market had a decent uptrend day on Monday as the breakout from Friday continued, but the pace shifted between Friday's highs and Monday's highs. The slowdown created plenty of opportunity for intraday traders looking to take advantage of the 5-minute price swings, but was more of a test of patience for those holding the larger time frames because it meant more overlap in price action on the 15-minute time frame from one bar to the next as the market slid into upper channel resistance on that time frame (shown in Figure 2). This level of resistance was also the 200-day moving averages in the Dow and S&P and equal move resistance on 5 and 15 minute time frames (Figure 1). Meanwhile, the Nasdaq has to deal with resistance of its own as it approaches July's highs.

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