The stock markets show indecision

Also the second trading week of the new year passed quiet and uneventfully. There wasn’t any movement in the markets before Friday when the information leaked out that the EU countries were to be downgraded. That led to a stronger decline which was used yet for some buys from the lunch time onwards. Altogether the week ended rather positively and with some new uptrend highs.

But the reversal candle on daily basis that arose on Friday is suggesting that by the beginning of the reduced week we’ll have to reckon with a tendency to falling prices at first before from Wednesday new highs are expected to be headed for.

The monthly setups are the most important signal transmitters within the GUNNER24 Forecasting Method. They supply us with the most important supports and resistances, long-term turning marks on the trend and thus the crucial entry and exit signals.

Furthermore the monthly 3 Candle GUNNER24 Up Setup of the Dow Jones indicates that the equity markets aren’t ready yet, some new highs on daily basis are waiting. The upper line of the 3rd double arc at 12543 keeps on being the target. Unambiguously we identify how important the 3rd double arc is for the index and how precisely the market is following the lines of the 3rd double arc. December 2011 closed exactly underneath the lower line of the 3rd. Then the lower line of the third had still a resistance function. January 2012 opened exactly above the lower line thus changing its state from resistance to support. Technically the market has to head at least for the upper line of the 3rd at 12543 now. The probability for that is more than an 80%.

What will happen there at the upper line is all in the stars. But the probability is high that the market will retrace for the moment or even ring in a change in trend. But a sell signal on monthly basis wouldn’t be present therewith. It won’t arise before we’ll see a new monthly close below the 2*1 Gann Angle.

Can the 12543 be overcome on monthly basis becoming the 14000 the target…? Yes, they can as well, of course – that is indicated by the NQ-100, as analyzed last week already. With the weekly close above 2370 the equity markets made a first important sign that is pointing to the continuation of the upwards trend until March 2012.

Confirmed target for the NASDAQ-100 is the 5th double arc now. Target is 2520.

The probability of the 5th double arc to be reached in the trend direction is far more than a 70%. Since the 4th double arc is clearly broken now keeping on resisting above the 1*1 support Gann Angle our long entry above 2370 was triggered. SL is a weekly close below 2221.

The fact that the 2370 were not overcome before the last trading minute causes some bellyache to me. Instinctively a classical bull trap occurs to me. But in Gann trading it’s simply like this: Certain magnets have to be headed for and their overcoming release the corresponding signals then as well as the reaction to those magnets do. In any case, the fact that the market did not decide to close above 2370 before the last minute teaches us this: It is often very important to take into consideration the close of the hour, the day, the week, the month or the year before a decision can be made.

Let’s get back to the Dow Jones now. At the end we’ll consider it again on daily basis in order to examine the probability of the possibly last exhaustion hop up to the monthly target at 12543, to analyze the possible course on daily basis and to hedge the long position that is lying in the profit zone: