The Dow Chemical Company (NYSE:DOW)

Q: Does it look like Dow is going to continue in this down trend, with an upswing sometime into Sept. 09?? Or do you think the trend is overall down forward looking?

Keith A: We called a Downtrend on DOW on June 23rd after it crossed below the 50-day moving average.  You can see that it tried to cross above the 200-day average, several times (5/20 and 6/2) and after failing to do so, that invited some sellers who believed that the rally off the March 10 low may be ending.  Our trends normally last about a month so there is no indication at this point that the Downtrend will last into September but anything is possible and trend trading requires confirmation of an upswing before one can be called.  Since Dow ran up from $5.89 to $18.99, some correction is to be expected.  The stock has already given back about a third of that gain – which is a key Fibonacci retracement level.  The gap area on 4/29 (!$13.80) should be next level of support and an area we will closely watch for a possible bounce which could be the start of a future Uptrend, provided the broader market complies.  Earnings on 7/30 will be of interest as a possible catalyst.