Market Commentary for June 4, 2020

Powering Through

Wednesday we pushed back 25,800 Resistance in a steady upward climb.  This is now our new Daily Support Level.  The advance of the past few has been very strong, so a pull-back should be expected as far back as 25,000.   

With the recent advances we have seen there is a lot of celebration among market participants.  But we still have the overhang of an economy on the ropes.  We must continue to follow the new Support Levels up, but be ready to change posture if the market starts falling through them.

DJIA – 39 Minutes

Once again, the broad consolidation in the Daily chart implies a move to 29,500, which is 2x the distance to the center.  Sometimes consolidations form exhaustions and break in the opposite direction.  This one appears to be pushing towards this projected level.  Continue to monitor short term support at 25,000, and long term at 24,800.    

DJIA – Daily

We have never seen anything like this in the history of the U.S. stock market, where participants completely disregard trillions in new federal debt, bankruptcies and depression-level unemployment.  So we have to be ready for severe weakness entering the market.  That’s not the same as “pull-backs”.  I’m talking about severe down day breaking 25,000.   Otherwise, accumulate sympathy stocks or those that have lagged the general recovery.

Ed Downs