The Real Facts

The Dow projections we list below are the longest detail we've provided within projections in some time, and there's a strong reason for it. We have been showing projections that occur typically within a 4 to 21 day period, obviously moving more quickly around any increased volatility. There's a detailed reason for this. Originally we saw a market top at 8850, and slowly revised our projections as the market continued euphoric upside.

We've now hit our various support and resistance lines, as noted below, numerous times, showing a market not sure of itself, and "waiting".

The real facts are:

1. Unemployment will soon hit 10%, Obama says, which means really 20% in real people out of work.

2. The manufacturing sector is not expanding.

3. Our debt rises, and our issues mount.

Roubini, who we study, and believe:

http://us.mobile.reuters.com/mobile/m/AnyArticle/p.rdt?URL=http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55F4ET20090616

There is a strong possibility of whipsaw here, with market moves to 8850 up, back to 8350 area, and returning to above 8850, AFTER we complete the cycle in the Dow we are in.

The best trading is taking place by recalculating the Dow or the OEX during the trading day to catch the tight changes that take place after some volatility occurs. We highly recommend using our pivot point calculator for tight day trading.

Study in advance the news that can trigger market movement, such as the upcoming FOMC announcements next week. This is normally a whipsaw trigger area in the market, and the speculation is already rampant.

Study: http://www.bloomberg.com/apps/news?pid=20601087&sid=arWqPRMOr14A

We list these detailed Dow projections specifically because we see the market struggling through a trading range, and hitting bottoms.

By 3. p.m. the market had bottomed on the theoretical Dow at 8401, and had hit tops of 8603.

Many traders wrote yesterday wondering how to trade around s1 or r1, or pivots, on a day that has such tight trade movements. Remember, at times we don't need S/R. Here's an example:

In today's market, the Dow moved in such tight ranges that the pivot, s1, and r1 were all "repeated struggles," show a market at a crossroads.

And for clarity: 64% of rich Americans say they have “lost faith in the integrity of financial service institutions.”