DJIA going to correct

My last up-date on STI indicated uncertainty on my part. This is mainly because STI is at a cross road to me. While there are a few factors on chart influencing its direction I was not so sure which would be the one.

At the moment, the one thing that seems to drive STI is the Dow, STI is following Dow's up-trend to push itself up. With Dow's help it has now surpassed 2,900 mark. So it worth while to look at Dow for a while.


DJIA Weekly Chart

Base on the indicators Stochastic and RSI, Dow ia certainly on the up trend on weekly basis. Both indicators are at the bottom and with divergence. Its 21-week Moving Average is resisting at 10,322 while 89-week moving average supporting at 10,123. One thing to note is the trend resistance line presently located at 10,323. So it seems that while it is gearing for up trend, there are some factors preventing its progress.


Fig 2 DJIA Daily Chart

Moving onto the daily chart,it seems to be telling a different story. Stochastic and RSI are toppish, especially for Stochastic. RSI is tapering off. This is much in contrast to a few days back when Dow was only on verge of reversal.

Additionally, Dow is also reaching the apex of the Gann Grid lines transfering from positive to negative gradient. My guess is, Dow is reversing again.

So if Dow is on continuation mark on weekly while reversal mark on daily, Dow should be on a correction on the coming week. At the same time, I feel that Dow might not go very far this time round, especially when the indicators move too fast. It is giving little leeway for Dow to progress. A correction would do Dow much good.