The Dow is setting up to move Higher! This Gap is trying to fill
Hey Traders, I have done some analysis on the Major indexes, (Dow, S&P, Nasdaq etc.) I believe the general Markets may be attempting to head higher here. I am still cautious as I have mentioned in previous ideas and will not be leaving myself over exposed to one side of these markets however I am leaning towards a long bias this week. I think the recent gap on the Dow will fill but it is Important to see how price reacts around that level. If we see price get rejected hard off that level then I will most likely be wrong and price will head lower. On the other hand, if we see a strong bullish move this week that breaks through the point at which the gap is filled, then we will most likely see a continuation to the high side. We may see price retest there all time highs and possibly go higher. The Red support and resistance lines (zones) on the chart above are crucial levels for me. Also the yellow zones are areas at which I believe price is being pulled to and I think these areas of price will be a big tell on which way this market wants to move.
Reasons why I am expecting price to move higher here:
1) Gaps in the Dow tend to fill
2) We had a daily close outside of the lower Bollinger band at a fractal level followed by an immediate close back inside the bands.
3) Price is bouncing off the 100 period moving average. (Shown on Chart below)
4) Price was able to break and close just above the 50 period SMA. (Shown on Chart below)
5) I am seeing some weakness in Bonds right now. I think money is going to come out of the Bond Markets. This money will typically make its way over to the stock market.
I put Stops and Targets on the Dow only for illustrational purposes. I have not placed any trades on DIA. We need to keep an eye on how this plays out over the next couple of days and react accordingly to capitalize on the movement! I personally have a long bias regarding the markets as of right now and will be looking for long positions if this turns out to be true. I will be hedging all large positions as I always do and will not leave myself over exposed to either side of this market. Volatility tends to pick up right before a big move and I believe that move is coming over the next few weeks. We cannot be certain on which way this move will go but we can react to price and use our best judgment to put profits in our pockets! I hope this was helpful! please comment below with your analysis or any questions you may have. I will be Publishing a Gold & Silver idea asap as I believe they may be getting ready for a big move as well! Thanks Traders!
Reasons why I am expecting price to move higher here:
1) Gaps in the Dow tend to fill
2) We had a daily close outside of the lower Bollinger band at a fractal level followed by an immediate close back inside the bands.
3) Price is bouncing off the 100 period moving average. (Shown on Chart below)
4) Price was able to break and close just above the 50 period SMA. (Shown on Chart below)
5) I am seeing some weakness in Bonds right now. I think money is going to come out of the Bond Markets. This money will typically make its way over to the stock market.
I put Stops and Targets on the Dow only for illustrational purposes. I have not placed any trades on DIA. We need to keep an eye on how this plays out over the next couple of days and react accordingly to capitalize on the movement! I personally have a long bias regarding the markets as of right now and will be looking for long positions if this turns out to be true. I will be hedging all large positions as I always do and will not leave myself over exposed to either side of this market. Volatility tends to pick up right before a big move and I believe that move is coming over the next few weeks. We cannot be certain on which way this move will go but we can react to price and use our best judgment to put profits in our pockets! I hope this was helpful! please comment below with your analysis or any questions you may have. I will be Publishing a Gold & Silver idea asap as I believe they may be getting ready for a big move as well! Thanks Traders!
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