The S&P 500 Index has been a bit hard to read for beginners as the charts are giving bearish signals yet it continued to move up and break above certain strong resistance levels. As for The Dow Jones Industrial Average Index (DJI), this one is telling us a different story, this chart is much easier to read.
When you look at the chart, you can clearly see lower highs being printed, this is marked with blue down arrows.
On top of the lower highs, we also have hidden bearish divergence marked on both the MACD and RSI, which are also in a downtrend.
Both the MACD and RSI are also trending down and getting closer to entering the bearish zone. A strong drop is scheduled to happen soon.
I am looking first at 0.618 Fib. retracement for support followed by 1 Fib or EMA200 (orange line).
Conditions for change: For this analysis to become invalid, the DJI would need to move up, close, and remain above 26951.8, which is its all-time high. This is a very unlikely scenario at this point, but if you are trading this or any other asset, it is always smart to remain open and be prepared for all scenarios.
With that said, I believe the DJI will continue with its bearish tendencies and decline in value in the coming weeks and months... What's your opinion? Share in the comments section below.
Feel free to hit like to show your support.
Thanks a lot for reading.
Namaste.
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