4/1/08
What a incredible rally traded today for Dow closed gain almost 400 points today!! On the bright side, it breakout the highs of last week, start with positive note for second quarter and even UBS bank going to write off huge 18 billion in their coming earning. Consider next strong resistance is around 12750 for the Dow indexes. Usually, market could break the resistance on 3rd or 4th try and let see if there has another leg up tomorrow to breakout that stronghold. Also, USD/JPY is trading above 100 and breakout 101 level early this morning which help the DOW keep rally upward today after Japanese registered the worst business confidence level for last 5 years last night.
Technically speaking, today up volume is slightly less than normal trading day and NYSE only has 30 new highs( Good healthy rally need at least 50 or even 100 new highs). In addition, VIX is touching the 200MA figure(21-22 area) which may indicate the market is close reaching top. I need to see one or 2 more days to confirm this. The strong resistance level 12750 would test if market has another leg up. To be a good trader, always need to be flexible and follow the trend. Although I am still bearish about the us economy and stock market, not surprise if Dow could breakout 12750 or higher.
P.S. Bernanke Fed chairman is going to be testified 8:30am central time. Let see how market react with his explanation of bail-out of Bear stearn....etc.
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