Dow Jones, S&P Stock Markets: Why Are They Rallying Right Now?

by tradingrebel7B on March 17, 2009

As you will see from the chart below, the Dow Jones shows major support from a long-term trendline going all the way back to the low of 1987 following the Stock Market Crash. THIS is why the stock markets have been rallying of late and for no other reason.

Dow Jones Stock Market Long-Term Trendline Support

A closer look at the recent price action shows a down-ward sloping channel in place. There was also major support derived from three coincident Gann levels derived as price projections from recent tops. These came into the region of 6468-6474. All of THIS put together is why I was able to go long the Dow Jones at 6474, just four points off the major bottom! (If you don’t believe me, see my post on March 6th Twitter calling that bottom within just minutes after it had been made!)

Gann Support Levels Giving the 6470 Bottom On Dow Jones

However, the overall long-term picture is NOT bullish at all. We can expect to see these markets rally for maybe a couple of weeks at best, enter the usual sideways consolidation range and then resume the bear market in earnest to take out the bottoms and trade much lower still.

S&P Long-Term Bearish Double Top Chart Formation

On the S&P500, for example, we can see a Double Top in place and completed so enormous that that its price target would be negative prices, i.e. the price would have to go below zero to fulfill it! Be that as it may, the point being made is that the bear market is in place and set to continue for far longer. The rallies we see at present are bear market rallies. Enjoy them while they last, but be prepared to reverse to the downside once more. Obviously, from an investment standpoint, this is STILL not the time to be buying into the stock markets.

For expert in-depth information on all aspects of Stock Trading, visit
Stock Market Trading

Leave a Comment

Previous post:

Next post:

You can read our full Privacy Policy here and our Terms Of Use here

AKS Trading LLC, 1712 Pioneer Ave., Suite 327,
Cheyenne, WY 82001, USA.  Tel: 815-550-1877