TECHNICAL ANALYSIS
The DJIA ended an outside week down with a -4.13% loss. Friday’s trade took the index into the previously outlined ‘last-gasp’ support area at 30810/30680. The action filled in the gap that has stood on the daily chart in that area since July 15th. A late rally took prices to close near the upper end of the days range. The action this week has taken the market to new lows for the downmove that started in mid-August. Initially, the daily is flashing a bullish divergence. The hourly chart is also in a small bullish divergence with Friday’s new lows.
DJIA Hourly
From an intermediate-term standpoint, the 30680 level remains key and closes under that area will setup a retest of the June lows at 29653. Weekly support is near-term critical at 29794/29653. Closes under 29653 opens counts to 29082. A breakdown under 29082 counts to 28902 with counts to 28495. Under 28495 opens counts to monthly support of 27583.
Short-term, resistance is 31011. A drive over 31011 sets up a test of hourly swings at 31269/31296. A move over 31296 sets up 31527. Closes over 31257 should test 31757/31780. Closes over the 31780 area should take out the 32006/32042 level and open counts back toward intermediate-term resistance in the 32415 through 32504 levels. Bearish technical sentiment cannot really be abated unless there are closes over 32504 level with critical intermediate-term resistance at 32855/32880.
Final note: Next Friday/Monday the 23rd and 26th marks a key timing point for stocks.
Charts courtesy of CQG, Inc.
