MIKE PAULENOFF'S ETF TRADING DIARY
My pattern and momentum work on the 4-hour Dow Diamonds (AMEX: DIA) price action off of the July 15 low argues that the upleg from the 108.33 low to the 115.65 high (7/21) represents the initial recovery rally leg, and that the weakness into today's low at 113.80 represents a shallow correction of that initial upleg. If my work proves accurate, then current "strength" that is pushing up against the 115.00-115.65 area is the start of a secondary -- and possibly very potent -- upmove that will thrust above the May-July resistance line at 115.50/60 and accelerate to the upside to 117.50 next. At this juncture only a decline that breaks 113.10 will wreck the developing countertrend rally technical set-up.
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