DowJones - Nice recovery but where next?

 

Equities saw a good recovery yesterday after the prospect emerged that the western intervention in Syria could be resolved without dropping any bombs.  We are seeing further follow through again today.

We are trading back above the 15000 mark on the Dow Jones Ind. Av.  and more importantly above the high made on the 26th August at 15054 which should give the bulls some encouragement.  On the upside, we could see some resistance however around the 100 & 50day MAs given the strength they displayed as a supports at 15161 and 15256 respectively.


The next couple of trading session closes could prove to be important in terms of indicating where we are heading next.  Strong confirmation days higher could keep us pushing higher back to the previous all time highs.  If we start to see some 'Doji-esque' candles print, displaying uncertainty of the validity of the rebound, and we may head back down quite quickly too.

Not sure that were out of the woods just yet however on the fundamental side, we have the impending Tapering action which we will know much more after the Fed meeting on the 17/18th of this month.  There is also the 'Fiscal Cliff' issue coming up again and German elections on the 22nd of this month too.

We have yet to test the 38.2% retracement at 14445 nor bottom of the trend channel at 14200.




Charts sourced from ig.com