Market Action Update
If you can imagine it, you can create it. If you dream it, you can become it. ~ William Arthur Ward
Dow Four Hour Chart
The blue line at 10980 was pierced but a battle took place for the majority of the session which can be evidently seen from the 15 minute chart below:
They took out the line at the open and battled with it for most part of the session. We regained it and then the story was obvious. Virtually all the decline was wiped out and that is why we said we would like to see where price is at the close.
There is a chance that the Dow Jones is basing at current levels. We are at a fine line situation and this basically means if we fold at current levels we simply move MUCH lower. However folding here and we could firmly end the year above 11000 and no doubt this will leave the bullish headlines attracting new optimism for next year.
Notice how price is at the underside of the red downward sloping channel shown by the four hour chart. Yesterdays low also sits at our yellow base line which needs to be taken out for price to really collapse. We will have to watch further for Tuesday's session and see if the oversold Euro can stage a turnaround from 130 which will no doubt turn the markets bullish.
Crude Oil Four Hour Chart
Crude has some overhead problems shown by the blue line which represents the underside of the peak at $88. Failing here and we would be back to support at our red range breakout line which could happen very quickly if price doesn't take out $86 successfully.
GBP.USD Daily Chart
The indicator could be getting oversold here on the daily chart but the market must decide if the recent decline will pay respect to the top of the yellow support line at 155 or the top of the blue support line at 153. Taking out both would only express the extreme bearishness and prices under 150 would be likely.
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