The difficulty of $SPX breaking out of this historical resistance above (1,472-1,475) poses a significant threat to our projections for higher highs at the moment.

There is a clear need for the aforementioned breakout in $SPX (SPY has already broken out above its historical resistance line).

Perhaps with the big banks' reports coming out over the next 2 days, we will be able to fuel our advancement.

However, if the banks disappoint, there is considerable risk that we may fail this rally.

Update:

All is going according to plan: We are on our way to Dow 14,000.

When Dow closes below it's 5 day EMA, we will know that me may have reached a top.

After that, we will experience market moves that will be characterized as "bear" market

The pullback during the last 2 trading days in the stock market, as viewed through the Dow Jones Industrial Average, is to be expected, as the stocks gained too much too quickly (over 500 Dow points in less than a week): Traders had to take some profits off the table in anticipation of the "official" beginning of the earnings season in the US today after the close today with Alcoa (AA) reporting.

Our model predicts/projects that the current pull back's target is 13,235, but it is possible for the Dow Jones Industrial Average to dip as low as 13,145, without invalidating the aforementioned 3rd thrust target of Dow Jones Industrial Average at 14,037 (13,778 - 14,297 range).  

A close below the support of 13,884 on the Dow invalidates the above calculations.

The Dow Jones Industrials Average current uptrend is approaching the "End Zone"

The stock market rally that began on November 16, 2012 will soon end.

Based on our calculations, we predict that the target price for this uptrend on the Dow Jones Industrials Average index will be between the range of 13,778 and 14,297, with an average target price of 14,037.

The graph shows that we are in the 3rd and final thrust upwards (Elliot wave 5 equivalent) with the DJIA closing at 13,435 on Friday January 4, 2013.

Since the bottom of the market in March 2009, most of these final thrusts have failed prematurely without reaching their calculated targets. With the Q4 earnings season beginning this week in the U.S., we expect that we may see increased volatility, although recent reductions in earnings estimates may in fact serve to propel the market higher if companies are able to beat their numbers and provide encouraging guidance for the next quarter.

After the market finishes this last thrust upwards, it is likely to fall in price over a period of several weeks (or few months), depending on the severity of the economic news.

DISCLAIMER: This blog shall not be perceived as investment advice. This is a personal diary of our thoughts on the markets. Consult a professional broker or adviser before investing .  Any opinions, news, research, analyses, prices, or other information contained on this blog are shared as personal thoughts and provided as general commentary only.

Objective of this blog

The purpose of this blog is to serve as a personal diary of our thoughts on Dow Jones Industrials Average index and our predictions of prices and moves thereof.

There is absolutely no intention to offer any type of advise, financial , investment or other, to anyone.

Our e-mail address is Tradesfordummies@gmail.com

DISCLAIMER:
This blog shall not be perceived as investment advice - Consult a professional broker or adviser before investing .  Any opinions, news, research, analyses, prices, or other information contained on this blog are shared as personal thoughts and provided as general commentary only.