Holding just above 8100 support. DJIA declined another 248 point last night to close at 8200 point. The Index reached as low as 8140 point last night before buying support kicked in.
This is not a surprise as the critical support for the DJIA is at 8000-8100. Break below 8,000 is very bearish, likely indication that wave “5” down-leg has kicked in already.
If wave “5” has started and assuming wave “5” equals length of wave “1”, DJIA could target 6,600 before bottoming.
Volumes rising. Trading volumes has been rising the past one week and this is not a good sign. The daily chart shows two bearish patterns, bearish rising wedge and a longer term descending triangle formation.
This is in line with our wave count projections. However, DJIA might not reach these levels as it is likely the “Plunge Protection Team” is expected to provide market support at the 8,000 levels.
Weekly chart looks bearish. DJIA’s weekly chart looks negative. RSI failed to breakout while MACD is hooking downwards. Key support level is at 8,000-8,100 points. If MACD reverses and confirms its “dead cross”, this would be very bearish and likely confirmation wave “5” down-leg has kicked in.
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