Daily DJIA Friday, December 31, 2004

Instead of moving up toward 11000, the Dow closed lower today and the price bar has turned red. Although this could be a false move downward and the Dow could still move up, the indicators below show a very overbought market and the CCI has been trending downward for a few days.

How can we reconcile the downward bar of the monthly chart, the upward prices of the weekly chart and the now downward move in the daily chart? At this time, I'm still trying to learn what the market is telling me about its direction. Of course, by the market, I'm referring to the psychological participation and bias of the market participants, the crowd mentality. It's because I believe that crowd behavior is somewhat predictable based on early adapters jumping in, the vast market participants coming aboard next and the laggards getting "stuck" at the end of a trend that I'm endeavoring to determine if some indicators will enable me to spot each of the types of market participants. I've still got a way to go, but detailing and blogging my thoughts is focusing me on what makes the market really move.

I hope for a profitable 2005!