Outlook for the Dow Jones Industrial Average
The trend is obviously down in the markets right now. But the sshort term indicagtors are showing very oversold conditions. There could possibly be a small uptick in the markets to temporarily cool off this very strond downward momentum. If this swift momentum continues then 3400 on the SPY looks very possible this year. Get the weekly technical outlook for the broader markets in the link here: https://youtu.be/3n_d5KqIS7w
$SPDR Dow Jones Industrial Average Trust(DIA.US)$
$SPDR Dow Jones Industrial Average Trust(DIA.US)$
The Dow Jones Industrial Average has been tanking with the rest of the market. The Federal Reserve's hawkishness seems to be bringing down the market further. But the market doesn't go down in a straight line. There are always small bounces or bear market rallies on the way down. So when is the next bounce in the DIA?
The downward momentum is very strong in the current downtrend so it may be difficult to enter into a long position currently. But if you were bullish on the markets then the price might appear to be in a good technical position for a possible bounce in the near future.
You can see in the chart below how the DIA's price is near a support zone from a previous high created before the market crashed in 2020. If you follow T/A then you know that previous highs are used as strong supports very often. If the price does dip lower then all of the gains made after the pandemic will be erased. I've also highlighted some previous areas of consolidation on the chart. If DIA's price does travel lower then theoretically the price action should have difficulties getting through these consolidation areas to the downside as there are several support/resistance price points within this consolidation zone.
Notice the oversold conditions on the weekly candles in the picture below. Weekly RSI for the DIA rarely reaches the bearish territory below the RSI 50 value so we are in some interesting times in the markets these days. Weekly MACD experienced a bearish crossover last week. Basically things are looking very bearish on the indicators for the long term picture on the DIA.
Remember that the market doesn't just go straight down. And the DIA is near a previous low. Always watch out for a small bounce near previous lows.
The daily RSI is in extreme oversold conditions. This is a bullish look for the very short term picture. But the downside momentum is strong. So be very careful if planning on entering into a long position. Wait for confirmation of the uptrend. For example wait for the price to make a higher low. Or if you are more aggressive then wait for the price to move above the 9-day moving average before jumping into any long investments.
Its not smart to fight the trend so if there is any small uptick in price then any long position should be short dated based off the current downtrend.
On an interesting side note you can see the monthly RSI below and how the value has recently dipped into bearish territory. The last time this happened was in the financial collapse of 2008. If you are a long-term investor then this is a very scary picture. It appears that there will be more downside in the future but always remember that old wall street proverb, "when others are fearful then it is probably a good time to be greedy." Personally I wouldn't step into any long-term investments at this point but with the monthly RSI value at these historically low values then based off of the past then possibly this is technically a good area to scoop up some relatively cheap shares of DIA. But a continuation to the downside appears to be in out future possibly so any long-term investments might want to be put on hold temporarily.
I do want to point out that from this small pool of voters from last week there appears to be some bulls out there at these low prices.
$Invesco QQQ Trust(QQQ.US$ $SPDR Dow Jones Industrial Average Trust(DIA.US$ $SPDR S&P 500 ETF(SPY.US$ $iShares Russell 2000 ETF(IWM.US$ $VIX Index Futures(MAY4)(VXmain.US$ $Gold Futures(JUN4)(GCmain.US$ $Powershares Exchange Traded Fd Tst Db Us Dollar Index Bullish Fund Etf(UUP.US$ $SPDR Gold ETF(GLD.US$ $iShares Silver Trust(SLV.US$ $Ishares Iboxx $ High Yield Corporate Bond Etf(HYG.US$ $Ishares Iboxx $ Investment Grade Corporate Bond Etf(LQD.US$ $iShares 20+ Year Treasury Bond ETF(TLT.US$ $Crude Oil Futures(JUN4)(CLmain.US$
$TENCENT(00700.HK$ $SSE Composite Index(000001.SH$ $CSI 300 Index(000300.SH$ $CSI 300 Index(000300.SH$ $FTSE Singapore Straits Time Index(.STI.SG$ $NIO-SW(09866.HK$ $NIO Inc. USD OV(NIO.SG$ $NIO Inc(NIO.US$ $BILIBILI-W(09626.HK$ $Bilibili(BILI.US$ $Baidu(BIDU.US$ $BIDU-SW(09888.HK$ $XPeng(XPEV.US$ $Li Auto(LI.US$ $BYD COMPANY(01211.HK$ $BYD Company Limited(002594.SZ$ $S&P/ASX 200(.XJO.AU$ $FTSE Singapore Straits Time Index(.STI.SG$
$TENCENT(00700.HK$ $SSE Composite Index(000001.SH$ $CSI 300 Index(000300.SH$ $CSI 300 Index(000300.SH$ $FTSE Singapore Straits Time Index(.STI.SG$ $NIO-SW(09866.HK$ $NIO Inc. USD OV(NIO.SG$ $NIO Inc(NIO.US$ $BILIBILI-W(09626.HK$ $Bilibili(BILI.US$ $Baidu(BIDU.US$ $BIDU-SW(09888.HK$ $XPeng(XPEV.US$ $Li Auto(LI.US$ $BYD COMPANY(01211.HK$ $BYD Company Limited(002594.SZ$ $S&P/ASX 200(.XJO.AU$ $FTSE Singapore Straits Time Index(.STI.SG$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Trade the trends via technical, fundamental, and macro analysis. Day Trades, swing trades, and long-term investments.
16KFollowers
2942Following
28KVisitors
Follow
SpyderCallOP : @BeBlessed here is a little technical analysis for ya
BeBlessed SpyderCallOP: Many thanks Bro Spyder. I shall wait for the bounce to enter into a short.
Violets : so you think we may be green tomorrow right? I only skimmed your message and I'll read it in detail. of course there are going to be bounces and rallies in this market. I truly think we're going to hit new lows but of course I could be wrong LOL
SpyderCallOP Violets: I think there will be new lows as well. But the very short term indicators are showing extreme oversold conditions so there could possibly be a short-term bounce in the near future. But the market does whatever it wants so we could just continue the crash down even faster if we get some bad news because the slightly longer-term indicators show more downside before oversold conditions are reached. But I don't believe the market will crash down that quickly without some bad news. Maybe during the next earnings season. I don't have any short term long positions at the moment but I do believe we will see some choppiness on the way down. I will be very surprised if this is the bottom of the market this year, i doubt it
BeBlessed : my indicators show extreme oversold condition as well, yet the bounce is so weak each time.
Because of these, I remain staying sideline. It seems a little too low to short now even though low can be lower.
BeBlessed : Bro spyder, possible to share the levels of support and resistance for DJ?
SpyderCallOP BeBlessed: agreed
SpyderCallOP BeBlessed: Support Zones:
292.00
280.00
270.00
Resistance Zones:
303.00
310.00
312.00
315.00
BeBlessed SpyderCallOP: I presume e support zones are 29292 and 29280 and etc?
SpyderCallOP BeBlessed: the supports areas i mentioned are longer-term and very strong supports. But the resistance levels are shorter-term resistance levels.
View more comments...