Dow Jones heads towards target...

By Sandy Jadeja 11:44 10- Nov -2009

A blast higher towards a key price target has seen the Dow Jones placed clearly back in the hands of the bulls.

The previous week placed the index in a sensitive position which could have seen the bears come in and drive the market lower. Instead we saw a firm grasp on a key support level at 9693 and helped lift the index back above the 10,119 high.

As noted previously that a pullback may suggest that a downside correction could be in place rather than a larger degree change in trend. This is exactly what has occurred and has once again taken the Dow to higher levels.

In true fashion the index is also playing to the seasonality tune of higher prices for the month of November into December. The caution however is that we are approaching our upside price target of 10,335.

Right now the intermediate and short term trend remains bullish and we are very close to a resistance level which should provide further clues to the price action we may have on hand over the next few weeks.

Technical indicators are still positive although we did have a point where we very nearly had a sell signal on the short term momentum indicators. The longer term time frame is still in a buy mode and rather than bucking the trend we shall await for signals from the charts to initiate exits or shorts on our long trade.

Fundamentalists have been left scratching their heads by the behaviour of the recent move this year in which many had thought a larger degree decline could have been on hand. If we see further signs of economic weakness combined with technical weakness then there may be a messy season ahead for traders.

Sandy Jadeja is Chief Market Strategist for ODL Markets and founder of www.Spreadbettingtowin.com where he teaches low risk trading strategies and money management.