DOW JONES Critical level separating the Bull from Bear Market!

9 thg 11, 2022

It hasn't been more than a month ago (October 10) when we first posted the 1D MA300 (yellow trend-line) as our long-term target for Dow Jones (DJI):

The index came just a few points below it and so far we see a minor pull-back and consolidation, attributed both to profit taking as well as risk aversion before the important CPI report on Thursday.

As mentioned on the previous analysis, the range Dow is currently in is the technical Rejection Zone that has formed all previous Lower Highs of the 2022 Bear Cycle Megaphone pattern, all of which initiated massive selling legs to new Lower Lows. Even though the 4H MA50 (blue trend-line) is the current short-term Support, typically breaking below the 4H MA200 (orange trend-line) confirms the downtrend. Another strong confirmation of the bearish legs is when the MACD on the 1D time-frame makes a Bearish Cross.

The 1D MA300 (yellow trend-line) is practically what separates the Bull from the Bear Cycle. It is no surprise that since the August 16 Lower High, the 1D MA300 is trading parallel to the top (Lower Highs trend-line) of the 2022 Bearish Megaphone. A closing above it effectively confirms the shift to a long-term bullish trend with first target 34300 (August 16 High) and second the 35550 (April 21 High).



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