On Minyanville.com, Phil Erlanger pointed out that 10,500 seems to be a very strong long term resistance level for the Dow. This got me looking at a monthly chart of the Dow which reveals a couple of interesting points. First, Phil is probably correct…10,500 seems to be this decade’s resistance level just like 1,000 was the Dow’s resistance level in the late 1960s and 1970s. Second, several major trend lines will be intersecting in the second half of the year. Often these indicate major turning points. The Bollinger Bands are also contracting which indicates a big move could be on the horizon. Finally, based on the momentum and volume indicators the next move seems to be headed lower. Since this is a monthly chart these trends will probably play out very slowly but they are worth keeping in the back of your head.
