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Resistance of the Dow

By Total Trader | Published: 9 February 2009

Here is Richard Russell’s (Dow Theory Letters) interpretation of the situation: “Frankly, I’m very impressed by the stubborn and continuing resistance of the DJ Industrial Average. I don’t think many analysts realize the extreme importance of the Industrial’s steady refusal to violate its November 20 low. The action of the Dow contains the answer to the trillion-dollar question – ‘Is the bear market in a halting process – or will the stock market signal a continuation of the primary bear market?’

“So here we are – at a crossroads to history. The market will issue its verdict when, and only when, it is ready. But for now – if there’s anything traders love, it’s a market rising in the face of lousy news.

“An optimistic outcome would be a continued refusal by the Industrials to close below 7,552. An obviously more bullish outcome would be the DJ Industrial Average and the DJ Transportation Average continuing to rally and ultimately (both Averages) bettering their early-January peaks.

“Clearly, the most bearish outcome would be the Industrials finally breaking below the November 20 low and thereby confirming that we are still locked in a continuing primary bear market.”

Related Posts:

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  4. How to interpret the Dow Theory bull signal, according to Richard Russell
  5. Is this a true bear market bottom? – Richard Russell (Dow Theory Letters)
  6. Technical analysis: trends, support and resistance
  7. Technical Talk: S&P 500 up against resistance levels

This entry was posted in Market Reports and tagged Bear Market, Continuation, Crossroads, Dj Industrial, Dollar Question, Dow Theory Letters, Extreme Importance, Industrials, Love, Market Signal, Resistance, Richard Russell, Stock Market, Transportation Average, Trillion. Bookmark the permalink. Both comments and trackbacks are currently closed.
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