Is Dow Jones going above January high soon?

Dow Jones Trend Analysis - 2/19/2010

It was the second positive week after 4 consecutive negative weeks for the Dow Jones (^DJI). During the week, the ^DJI gained 303.21 points, or 3.00%, and closed at 10402.35 on Friday, February 19, 2010. It was the best weekly gain since November 6, 2009. Weekly volume was -27% below average. Read More ... A medium-term uptrend had started on March 9, 2009 at 6440.08 and reached 10767.15 on January 14, 2010. ^DJI gained -4327.07 points, or -67.19%, in 44 weeks.

Dow Jones Industrial Average

According to our publication on January 24:         There are two possible scenarios that we would like to consider. 1. The Dow Jones medium-term uptrend is completed. It has formed the three waves ABC structure. A new medium-term downtrend has started on January 14. The current short-term down wave that has started on January 14 is a first sub wave of a new medium-term downtrend. 2. The Dow Jones medium-term uptrend is still in progress. The current short-term down wave that started on January 14 is a forth sub wave of the current medium term uptrend. In both cases, the short-term downtrend is close to completion. A short-term rally may start soon. The rally has started on February 5th at 9835.09, gained 603.46 or 6.14% in two weeks and reached 10438.55 on Friday, February 19. A short-term falling channel that had started on January 14, 2010 is broken.

Dow Jones Industrial Average

During the last week, the price has advanced above the 50 Day Moving Average. Daily MACD line has moved above its signal line. Both crossovers are considered as bullish signals. Daily Lane's Stochastic is overbought while Williams' Percentage Range is strongly overbought. If scenario #1 is in play, a short-term downtrend from January 14, 2010 to February 5 is completed. It presents a first sub wave of the new medium-term downtrend. The second sub wave is in progress now. Considering the overbought daily technical indicators second sub wave should be near completion and a third sub wave down should start soon. If scenario #2 unfolds, a short-term downtrend from January 14, 2010 to February 5 is completed. It presents a forth sub wave of the medium-term uptrend (from March 9, 2009). The fifth sub wave is in progress now. The sub wave should bring Dow Jones above January high - 10767.15. The next week is critical to recognize witch scenario is in play. If after the short pause the rally continues, chances are high that scenario #2 unfolds. If we see next week a sharp decline - scenario #1 could be in progress.

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