The weekly DOW does look like more downside to come short and long-term. As the 50 week MA is about to cross the 200week MA, which the SPX did this week. The price action of today confirms our 1929 scenario (read today's first blog) assumption, although volume is extremely low on the sell side as well today, but that might change as soon as we drop below the triangle. The crucial level for the DOW is at 8500 with a target of 7500 once broken. That is a level the brave hearts may consider cautious buying - shorts need to be covered. The VIX also turns around today, heading for the 80 once again. Negative momentum comes from the Tech sector today but financials might add the next days, with Citi looking very weak and the BKX still due for some weakness.
Tuesday, October 21, 2008
DOW technical update
The weekly DOW does look like more downside to come short and long-term. As the 50 week MA is about to cross the 200week MA, which the SPX did this week. The price action of today confirms our 1929 scenario (read today's first blog) assumption, although volume is extremely low on the sell side as well today, but that might change as soon as we drop below the triangle. The crucial level for the DOW is at 8500 with a target of 7500 once broken. That is a level the brave hearts may consider cautious buying - shorts need to be covered. The VIX also turns around today, heading for the 80 once again. Negative momentum comes from the Tech sector today but financials might add the next days, with Citi looking very weak and the BKX still due for some weakness.
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