Sunday, December 20, 2015

Market outlook : 20 Dec 2015 - Dow Jones

So much for a Santa Claus rally!
  • The Dow has failed to break through overhead resistance that built up around 18000 during the first half of the year. You can see that using the horizontal "Volume by Price" histogram bars on the left side of the chart. 
  • That resistance has caused the Dow to lose all of its upward momentum (see the MACD line at the top of the chart) and falter just as the 50-day MA (blue) caught up with the 200-day MA (red). (That "bullish" crossover signal will almost certainly prove to be wrong and is a great case study as to why you can't just mechanically follow Moving Average signals.) 
  •  In addition, we see that market breadth is also eroding again via the McClellan Summation Index (bottom panel).

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