Wednesday, November 24, 2010

Before You Get Too Excited

First of all, today was not a valid follow-through day as volume was lighter than the day before even though the Nasdaq 100 and Composite had gains greater than 1.7%. More importantly, the action since last week's low still appears to be an upward correction. For the Dow it looks like a 5-3-5 zigzag on the 30 min chart. Below you can see a clear head and shoulders top pattern developing. These have not panned out well over the last two years, but perhaps after so many failures this one will work. If it does, the target is below the August high.

Happy Thanksgiving!

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