DJIA Market Update for Friday 8/10/12

Aug 10, 2012 -

Dow Jones Industrial Average Chart Analysis

The first question most of us ask is: where is the market going from here? Let us take a look at three things:

1) The top most section of the picture is the Stochastic technical indicator. Generally speaking if it approaches 80 and beyond it is overbought. On the flip side, you'll know that it is oversold when it dips under 20. Right now the market is showing 95+, which suggests that it is overbought.

2) The middle section is on balance volume. Right now it is showing flat volume, which doesn't suggest a bearish, bullish divergence, or a continuation of the trend.

3) The very bottom of the chart, shows the volume. You can see that it is declining, while the market is moving up. This indicator along with the Stochastic suggests that the market's current rally is weak and may reverse.

Disclaimer: Article is written for informational purposes. It isn't intended as investment advice.
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