Support Held, Consolidating. Watch 24,800 Down.
From Thursday, “Now, we are looking at the major support level at 24,800. If that doesn’t hold, it is probably a sign that fear has entered the market.” You can see from the 39 Minute Chart that the market basically consolidated Friday just above the clear support level at 25,000. The next support level – 24,800 – that we really need to watch that one Monday. A drop through would confirm the fact that fear has entered the market and is going to be the driving factor in days to come.
DJIA – 39 Minutes
As we reach that bellwether 24,800 level, all eyes will be watching to see if the market pushes through. We could enter a wide trading range as the Fed does everything it can to prop up this market. We were looking at a consolidation target in the Daily Chart of 29,500. This past week’s market action tells us this is now very unlikely, because we have pulled back enough to cause concern and hesitation among the bulls.
DJIA – Daily
From Thursday, “I don’t see any fundamental or news drivers that can push the market lower. That doesn’t mean they aren’t out there, just that they aren’t obvious.” Some say the Fed’s comments on the state of the economy was the negative news that sparked the sell-off, in addition to a renewed white hot focus on increased coronavirus cases.
We know the economic factors are just as negative as they have been for the past month. Is this where reality kicks in? Now that the market has shown its ability to give up major ground in just a few days, there will be fear in the market Monday. We need to see it overcomes the prior bullishness, and take action accordingly. Once again, 24,800 is the key support level that should indicate the resolution of the week’s market action.
Ed Downs
