NO breaks yet DOW - but close

Looking at the DOW;

2 hour chart

DOW 2 hours

1.  Still contained within falling wedge.  Low boundary 24k  Top boundary around 25k, then 25400 (key)
2.  watch for false breaks either way
3 as the wedge progresses trade will be more volatile - battle between sellers and buyers intensifies

Other markets are similar
DAX daily

1. Daily chart show large head and shoulders  (click link to read about this pattern)(bearish) pattern neckline around 11720, target 10200

2 The neckline was broken, and now it looks like a break above 10370 will be a rally to test that level 11721

3. A break of a head and shoulders neck line is usually retested

DAX 2 hours

1.  Looks like 10370 being tested ..next key level 10430

Markets can see a decent  rally and still not break the longer term bear trend..

warning signs that down trend has, breaking key levels on the upside  finished 

DOW key level 24,000

Watching the DOW - again the markets selling off; The talking heads on CNBC - always bullish - are like deer in the headlights, they do not know what to say or do.

They are still looking for a rally - I think we are getting close but still a final shake out in the cards.  And a key level is 24k.  On the monthly we can see that the steep up trend's lower boundary is at this level (give or take a few hundred points).

DOW MONTHLY

1 . A significant break below 24 k would indicate a large correction is under way

2. a test and hold of this level will more than likely see new highs

Why do I think we may be close to a rally?  Look at the daily chart.

1. There seems to be a positive divergence forming
2. It looks like a falling wedge  Which has bullish implications (click on link for explanation from stockcharts.com)
3.  Falling wedges tend to have a false break out in the direction of the wedge, which if it happens will be the final wash out before a rally

GOLD ..follow up

Looking at the daily chart..

Lots of support at 1525, so only a significant close BELOW that level would turn the chart bearish..
Many  looking at 1540 level as key, so a break there MAY see quick sell..but 1525 looks stronger.
If we break higher out of the large wedge..eventual target would be close to 2000 USD

IF we break 1525 where could it go?  
Previous resistance was 1438 in 2011 and once it broke there 1476 was support on the pullback, so a range of 1438 to 1476 could be possible

EURO

Rally from 1.26 to 1.33 has stalled.  Is that it?

Despite today's downgrades form Moody's the euro recovered after an initial sell off. making recent action more likely to be a CONSOLIDATION of the move up, rather than TOPPING.

Key level, 1.30 (a break below there would change scenario to bearish and at least a retest of the lows at 1.26)


Otherwise, above that level, suggests a continuation of the rally to min 1.35 and possible 1.40 as shown in the chart below.  Sentiment is quick to turn bearish, and short positioning still relatively large.

EURO DAILY, breaking out of falling wedge?

A look at the EURUSD DAILY chart

Price action is poking above that descending trend line (upper boundary of the falling wedge).  If we get a sustained push expect SHORT covering to come in, and a sharp rally.  Sentiment is still BEARISH on the EURUSD and there is still a record SHORT position.. conditions RIPE for a BIG squeeze!!

New YEAR !! 2012 rally...!

Will it be the "end of the world as we know it?" ..

Probably not !

DAX and FTSE are breaking our of downtrends /triangle formations..Copper close to breaking out of a triangle as well..

DAX has some tough resistance between 6170 and 6400 above 6400 and clear skies above...target 7200

Also Euro pairs look like finding support and with HUGE short positions a rally above key levels may initiate some short covering.  EURJPY looks like a FALLING WEDGE...

So if we get follow through the rally may be LARGE

EURO DOLLAR falling wedge (bullish)

Additional notes after re-reading my Edwards and Magee "Technical Analysis of Stock Trends"...unlike a Rising Wedge ("When prices break out of a Rising Wedge they usually fall away rapidly"), in a Falling Wedge "they are more apt to drift sidewise or in a dull "saucering-around" movement before they begin to rise"

May not be applicable to FX ..but worth watching..