June Dow Jones – The market tested support provided by the upward trending lower parallel line, on the projected reversal date. (Wednesday, May 25, 2011). This confluence of support may prove significant because it follows a possible 5-wave continuation pattern. The market need to confirm a reversal pattern confirmation before we know for sure but if it is confirmed, it would trigger the next strong price advance. I will continue to monitor this market for any swing trading signals and post any new developments on this blog or the next issue of the TMV Swing Trade Report
June S&P – The price action in the S&P looks pretty much the same as the price action in the Dow, but different. I know that last statement may be confusing, but the S&P downside price move is extended more than the Dow and has closed below the upward trending parallel line. The market did trade below the prior day’s low, as it trades into the reversal date, but there seems to be a reversal pattern forming “inside” the bar that could limit the downside potential in this area.