DJIA has just tumbled another 200 points today. It has tumbled more than 400 points in the last 3 days and more than 800 points for the last 18 days. It seems like it will keep tumbling down further and faster in the days to come. One of my regular visitors who successful predict this downtrend and he manage to make more than 50k betting on the S&P in just a matter of 2 days. Well good job to him!
Anyway, will this punishment for DJIA will continue and sent the market down further? Or will it stop from here and consolidate before going more downwards?
After very deep studies and thinking on the above matter, I believe that it will be a "Yes" answer to both questions above. I am predicting that DJIA will correct a little bit before the extreme punishment will occured and send DJIA back to its 1 and very important support at 10,960. If DJIA fails to hold and breaks this level, then the next target DJIA is heading to is 9990 which is the second important support.
Click on the above image to enlarge
Click on the above image to enlarge
The above chart shows that DJIA is going down fiercely with very high volume compare to the avearge. It is an extremely bearish signal which should be taken note.
Both the MACD and Stochastic are currently showing that DJIA is currently in the middle of the downward trend, it has yet to meet the oversold signal. In other words, DJIA will tumble more before it hit the oversold indicator and rebound.
Based on the above studies, I am very convince that DJIA will eventually hit the first support level at 10,960. From there, we will then analyze the global market and then should decide further will DJIA will hit the 2nd support at 9,990.
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