The correction from the ATH was inevitable as the Dow broke well above it's long term growth channel. What we've seen in the past few days is hungry hungry bears beginning to feed when the 10 year T Note reaches the 2.85% yield mark with today being no different. What's important to recognize in this relationship is how the DOW bulls are attempting to hold on these downward movements. The 1100 point drop found support at both the 100 day MA and the 0.236. The next two days show a brief brake of this support as well as an attempt to break out of the long term channel again and find higher support at the 50 day EMA. This breaking out of the longterm channel and holding at the 50 day EMA seems to be overly bullish as we had another 1000+ point drop with the market now closing below the 0.236 fibonacci marker. Currently sitting in a tricky spot within both the long term uptrend and short term down trends channels, as well as beneath the 50 day EMA support, with current volatility makes predicting the market a dangerous move, however it seems reasonable to expect that Bonds and Equities will continue their jazzy swing dance range trading within downward channel until a support is found in the short term. The 0.236 and the 100 day MA has been a decent point of resistance up until late today so it is not out of the question a consolidation occurs here with an attempt to breakout of the downward channel, however the 200 day MA and the .382 are also certainly within reason. Consolidation at either of these two areas does not call for a market reversal in the short term, as again they both reside within the current long term uptrend channel, however a break below the 200 day ma could be a much stronger signal towards the idea that this is a reversal of the long term trend, only time will tell.
*This is by no means financial advice and I'm quite new to this, so take the analysis with a grain of salt and use it as a gauge against your ideas, not as a sound prediction from an expert. Furthermore, critiques are also more than welcome.*
*This is by no means financial advice and I'm quite new to this, so take the analysis with a grain of salt and use it as a gauge against your ideas, not as a sound prediction from an expert. Furthermore, critiques are also more than welcome.*
