Technical Analysis of Financial Markets

Tuesday, May 30, 2006

Dow Jones - Testing Support and Resistance

Interesting day today, the Dow plunged some 180 points forming a tall red candlestick with no wicks. The Dow traded exactly between the Oct 2005 resistance from where it opened and closed at the day low right near the 38.2% Fibonacci retracement level from the year high; wiping-out the gains of three day rebound rally. This week's economic data is either going to breach the support or breakthrough the resistance and may set the tone for June's market direction; watch out for the FOMC minutes 7PM (UK-time) spike which ever way it may be.

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