DOW giving us a hint of what's to come
I don’t normally trade this market but I’ve been watching the Dow for many, many months waiting for this.
Many called this pattern since March a v-bottom. I disagree. I actually think the March drop and recovery is just the beginning of a massive long term double bottom that will span over a number of years.
The recovery has only happened because of the US printing money and propping up the economy until the election - but how long can this last? At some point the printing has to stop or slow down. It is only then that we will start to see the long term effects of the covid pandemic and the real recession will be felt in the market.
This is where I see the next leg down beginning. This can start to happen before the election - there is no guarantee it won’t.
I have already shorted the break of the trend line and took profit at support. I am now trading the recovery up and retest of the trend line. We will either create a lower low from here and continue down OR we will create another high, forming a double top. At either position I will take profit and open a longer term short, with the first target being the 24850 area. The 10&20 EMA’s are also about to cross bearish on the daily and MACD has already crossed.
I am also watching the DXY when making my trade decisions as when this is bullish, the dow tends to be bearish. When we broke the trend line, the DXY also happened to break a key area of resistance. Watching both to make trade decisions is a good idea.
It’s hard to say which way to go right now because of the elections and government manipulation so be careful out there.
If you want to short the Dow against BTC (if your BTC bias is bullish) then you can make bigger gains than shorting against USD. I found this exchange to do that here.
Many called this pattern since March a v-bottom. I disagree. I actually think the March drop and recovery is just the beginning of a massive long term double bottom that will span over a number of years.
The recovery has only happened because of the US printing money and propping up the economy until the election - but how long can this last? At some point the printing has to stop or slow down. It is only then that we will start to see the long term effects of the covid pandemic and the real recession will be felt in the market.
This is where I see the next leg down beginning. This can start to happen before the election - there is no guarantee it won’t.
I have already shorted the break of the trend line and took profit at support. I am now trading the recovery up and retest of the trend line. We will either create a lower low from here and continue down OR we will create another high, forming a double top. At either position I will take profit and open a longer term short, with the first target being the 24850 area. The 10&20 EMA’s are also about to cross bearish on the daily and MACD has already crossed.
I am also watching the DXY when making my trade decisions as when this is bullish, the dow tends to be bearish. When we broke the trend line, the DXY also happened to break a key area of resistance. Watching both to make trade decisions is a good idea.
It’s hard to say which way to go right now because of the elections and government manipulation so be careful out there.
If you want to short the Dow against BTC (if your BTC bias is bullish) then you can make bigger gains than shorting against USD. I found this exchange to do that here.