OsmanDiaz
Short

Standing On the Precipice - DOW Edition

AMEX:DIA   SPDR DOW JONES INDUSTRIAL AVERAGE ETF
This post is very similar to my previous post regarding SPY             (See "Links to Related Posts" below). I am very bearish on the DOW overall and I think we will see that translate into selloffs of DIA             to retest the $171.00 level. The trading during the shortened New Years week was lower in volume , but still indicative of an overall bearish sentiment in the market. My forecast is that Monday or Tuesday may see DIA             hovering around the $172.50 level before retreating even further to $171.00 later in the week. There is not much propping up the DOW at this point and I feel like we are on the precipice of another major selloff like we saw in August, with lower highs and lower lows preceding a breakdown to the $160's.

TECHNICAL ANALYSIS:
  • Candle: Solid Red Candle (Bearish-Sellers had control of the market all of last Wednesday and most of Thursday)
  • Volume: Increasing selling volume ( Bearish )
  • Stochastic (Slow): %D hovering around 30-40, %K descending, but greater than %D (Bearish-Sellers have control of the market)
  • MACD: Histogram very slightly positive, but falling back quickly towards 0, MACD moving towards a crossover of signal (Very Bearish )
  • Overall Trend: Downward-20 day EMA (Blue Line) nearing a crossover of 200 day EMA (Blue Circles) ( Bearish )

Agree? Disagree? Any feedback would be greatly appreciated! Thanks, and happy trading!
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