Here’s Where I See Dow Support
There are many technical
ingredients being thrown into the melting pot that suggest equities
could begin another leg up soon. We have Treasury bonds at extended upside
levels. There are many stocks floating back down to test their 200-day SMA. Many
two-step patterns (AB=CD) have developed into support zones. Plus, we are
hitting daily support on indices like the Dow Jones and Nasdaq. Let’s look at
a few of these charts.
First, let’s address Treasuries. This 30-Year
Contract
(
USM3 |
Quote |
Chart |
News |
PowerRating) pushed right through my parameters. So, I will
have to take a back seat in this contract until something sets up with my
Fibonacci work. As you can see, it is definitely extended, but we (I) know too
well that markets can stay extended. Whether I’m trading this contract or not,
there is still value in this chart, in that if we do get a selloff to develop in
bonds, it will likely provide support to the equity markets.
Mix the picture above with the two daily charts below of Dow
Diamonds
(
DIA |
Quote |
Chart |
News |
PowerRating) and the Nasdaq E-mini
(
NQM3 |
Quote |
Chart |
News |
PowerRating). With the DIA it appears there is still two or three points to the
downside (which translates to 200 or 300 points in the Dow Jones) until we hit
solid Fibonacci support, as well as the 200 day SMA.
NQM3 is also about to hit support that includesÂ
key symmetry levels.
Below are a couple of long setups to look for in case
equities heat up. Each of these either have symmetrical pullbacks, patterns,
Fibonacci price support, and/or time cycles looking for a reversal. If triggered
long in any one of these, my stop would be below the support zone listed on the
chart.
Finally, remember our WEEKLY
(
OIH |
Quote |
Chart |
News |
PowerRating) chart? This ETF was being magnetized up into a large
Fibonacci resistance zone where it would complete two bearish patterns. Well, we
are on the frontline of that resistance zone. Now it’s time to start drilling
down into the daily charts to look for possibilities of a reversal. I’ll keep
you posted.
Till next time,