August 3


Market Commentary for Aug 3, 2020


August 3, 2020

New Range, Consolidation Formed.  


From yesterday…I have marked two dotted lines in that chart, which I call the Action Zone.  I suggest watching for breaks of either line Friday – I would expect the resulting move to continue into Monday.”  


So, what happened instead of a decisive break, was a formation of a new consolidation from 26,000 to 26,500.   This is a Consolidation at Lows, which is Bearish, but now that we have this new, tight range, we are watching for a break of either line.


DJIA – 39 Minutes 

The Daily Chat HAS been generally bullish but that is now in serious jeopardy since we have a tight Consolidation at Lows.   We also note the existence of the two “Doji” patterns, back to back in the Daily Chart.  These are negative signs.  A continued push down below the new 26,000 Support Level will be quite negative, essentially setting us up for a fast move down to 25,000.


DJIA – Daily


In my last commentary, I talked about the Action Zone, “We have a clear Action Zone, which is simply a buffer around the Support Level.  I think the breakout from that Zone is what is going to give us direction for the next 2-3 sessions.”


Well, the market STILL doesn’t know what it wants to do!  Since we basically used those levels as boundaries for a new consolidation, we are back in the wait-and-see game, watching the lines at 26,000 and 26,500. 


At some point, direction will be resolved – at least for the short term.  The Medium and Long Term are just impossible to predict at this point, though the chart still indicates a bullish posture, based on the large Consolidation in the Daily.


Ed Downs 


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