Dow Jones Weekly - A Bearish Perspective

2020年4月9日

Here are some simple takeaways I have gathered on the Dow Jones:

- Key levels to watch currently are 23,500, 21,600, and 18,600. 23,500 was a major Support that was visited several times in 2018. 21,600 has been a minor support level that was visited in mid-2017 along with a downside wick on the weekly during the correction of December 2018. 18,600 was a major resistance level in 2016 that was unable to break for several months. Generally speaking, I believe 18,000 - 18,600 is a major Support zone as it stands.

- We broke below the 200 MA (Blue) and the 200 EMA (Orange). These have been fantastic entries for Bulls throughout the Bull market. However, it appears that we may be forming a Bearish Retest that could lead on to more decline. We have not below both the 200 MA and 200 EMA since 2010.

- During the 2008 collapse, the RSI spiked down to approximately 19 (Black Circles) before bouncing. In present day, we also spiked down to 19 (Black Circles) before making a recovery. In 2008, we reached as high as approximately 42 before continuing the decline. Currently, we are at the same level on the RSI in confluence with a Major resistance level and the 200 MA/EMA.

- I am of the opinion that the Dow Jones will continue its' downtrend shortly. The Blue box could serve as a Major Support Zone if the Dow Jones continues to decline. I do not think the 18,000 - 18,600 level will hold again. A move down to that region from current levels would be approximately 21 percent. A move into the Blue Box would be approximately 30%.

- This idea IS INVALID if price were to recover and hold the 200 MA and 200 EMA.