Also the second trading week of the new year passed quiet and uneventfully. There wasn’t any movement in the markets before Friday when the information leaked out that the EU countries were to be downgraded. That led to a stronger decline which was used yet for some buys from the lunch time onwards. Altogether the week ended rather positively and with some new uptrend highs.
But the reversal candle on daily basis that arose on Friday is suggesting that by the beginning of the reduced week we’ll have to reckon with a tendency to falling prices at first before from Wednesday new highs are expected to be headed for.
The monthly setups are the most important signal transmitters within the GUNNNER24 Forecasting Method. They supply us with the most important supports and resistances, long term turning marks on the trend and thus the crucial entry and exit signals.
Furthermore the monthly 3 Candle GUNNER24 Up Setup of the Dow Jones
indicates that the equity markets aren’t ready yet, some new highs on
daily basis are waiting. The upper line of the 3rd double arc at 12543
keeps on being the target. Unambiguously we identify how important the
3rd double arc is for the index and how precisely the market is
following the lines of the 3rd double arc. December 2011 closed exactly
underneath the lower line of the 3rd. Then the lower line of the third
had still a resistance function. January 2012 opened exactly above the
lower line thus changing its state from resistance to support.
Technically the market has to head at least for the upper line of the
3rd at 12543 now. The probability for that is more than an 80%.
What will happen there at the upper line is all in the stars. But the probability is high that the market will retrace for the moment or even ring in a change in trend. But a sell signal on monthly basis wouldn’t be present therewith. It won’t arise before we’ll see a new monthly close below the 2*1 Gann Angle.
Can the 12543 be overcome on monthly basis becoming the 14000 the target…? Yes, they can as well, of course – that is indicated by the NQ-100, as analyzed last week already. With the weekly close above 2370 the equity markets made a first important sign that is pointing to the continuation of the upwards trend until March 2012.
Confirmed target for the NASDAQ-100 is the 5th double arc now. Target is 2520.
The probability of the 5th double arc to be reached in the trend direction is far more than a 70%. Since the 4th double arc is clearly broken now keeping on resisting above the 1*1 support Gann Angle our long entry above 2370 was triggered. SL is a weekly close below 2221.
The fact that the 2370 were not overcome before the last trading minute causes some bellyache to me. Instinctively a classical bull trap occurs to me. But in Gann trading it’s simply like this: Certain magnets have to be headed for and their overcoming release the corresponding signals then as well as the reaction to those magnets do. In any case, the fact that the market did not decide to close above 2370 before the last minute teaches us this: It is often very important to take into consideration the close of the hour, the day, the week, the month or the year before a decision can be made.
Let’s get back to the Dow Jones now. At the end we’ll consider it again on daily basis in order to examine the probability of the possibly last exhaustion hop up to the monthly target at 12543, to analyze the possible course on daily basis and to hedge the long position that is lying in the profit zone:
Considering the daily 9 Candle GUNNER24 Up Setup we realize how undecided the market is showing and above all how many possibilities the market has got now.
The supports and the resistances are having equal power still balancing mutually. On the one hand we can see the expected resistance influence of the important Gann Angle that comes from the year-high 2011: It has clearly been limiting the further rise for four days not allowing any daily close above. The lower line of the 2nd has been backing the market for three days. That is visible in the daily closes of Wednesday and Friday which are lying exactly above the lower line of the 2nd. It’s all in a draw yet.
But the Friday reversal candle is indicating weakness at short notice. Also the next 1-2 days the market might go down within the 2nd double arc, always supported by the lower line of the 2nd before it may head for the 2011 resistance angle by the end of the week so possibly the monthly target at 12543 may be reached. Green arrow.
If the expected weakness gains power the support horizontal at 12284 might possibly fall and in the further course of the week the market might head for the 1*1 Gann Angle at 12060, rebounding newly so the 12543 won’t be headed for before the end of January. Dotted arrow scenario.
To hedge our long position next week we’ll cover in case of a daily close of less than 12284. Parallel we’ll put in an SL at 12250 MIT (market if touched). Parallel we’d also cover the S&P 500 and the NASDAQ-100 long positions in case both Dow Jones marks are reached.
In case of the 12543 being reached not only the daily Dow Jones but also the daily S&P 500 and the NASDAQ-100 long positions will be covered. About the current positions and the actual SL setting, please pay attention to the survey on www.gunner24.com/trading-performance-us-stock-markets.
As analyzed above in the consideration of the month reaching the 12543 on daily basis should technically ring in a strong reversal… But a dayly close above 12543 would make the upper line of the daily 2nd double arc become the target = 12600-12630. Also this daily resistance should really lead to an immediate turn off of the market, at least on daily basis. Reaching the 2nd double arc would augment very much the probability that the uptrend will continue, at least until March 2012.
But a new long position in the Dow Jones won’t arise before a clear daily close above the 2nd double arc in the actual daily 9 Candle GUNNER24 Up Setup!
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