Dow Jones moving away from a complete disaster
Recent weeks have been a tough one for global equities and indexes all across the globe as we have seen some heavy selling, something we haven't witnessed since February and March of this year. As rapid as it can get, selling can spread swiftly across the major exchanges and quickly make everyone's red lamp to light and signal for an incoming catastrophe.
Yesterday DJIA dipped under the 200 daily moving average and then buyers came in to save the day. The situation was averted, but we have three days left of this week so anything can happen. There are buying opportunities on the dips inside the green support zone, where the price finds support around the 200 daily and a couple of near-term trend lines. The index itself is still inside the long-term uptrend.
Alternatively: selling can begin once we have full closure under the 200 daily moving average, under the green zone, breach of 23.6 with closing under it and backtest of the level, which needs to fail. Currently, the battle still rages on for the future of the index and not only the US ones. We are talking globally here. Nothing more than fear has driven the markets to jump into a selling cycle as we have doubts about the future expansion of the global economy as it is showing early signs of slowing and the pressure from the FED continuing forward with their current monetary policy of increasing rates. As we are in the middle of the earnings season as well the effect from the better than expected results from reports are not enough to settle an accommodative boost to equities and indexes for new all-time highs. This itself is indicative enough of the sentiment of the market participants and casts a shadow for the short-term performance of the major indexes.