Will DJIA Continue its Downward Move?

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. 

US will Attack Libya and the Oil Price will Tumble!

Yesterday, I was looking at the NASDAQ stocks which tumble heavily. The first thing that comes to mind is will US interrupt in this war? If yes, what kind of soldiers will US sent to fight in this war? Kindly refer to the above picture for the answer.

Anyway, lets cut the bullshit. The reason I am posting the above heading is to get your attention. The real creme de la creme of this post is the analysis below on where are DJIA and NASDAQ heading to from here.

Click on the above image to enlarge

Based on the current technical indicators, DJIA is looking to find the first support at 11,000. The political unrest in the middle east is only the excuses for the reason sell down. DJIA is currently very overheating and it needs a catalyst or reason for it to consolidates. The reason political unrest in Libya will be the perfect reason. Both the MACD and Stochastic indicate that DJIA will continue to consolidate lower and tumble down further.

Click on the above image to enlarge

The Nasdaq Composite is also heading towards the important support at 2,460. Nasdaq has been experiencing upward move from 1,268 in Sept 3, 2010 to the current level of 2,745. That is an increased of more than 115%. I think it is about time for Nasdaq to consolidate down seriously before any upward move to continue. It is also a good reason to flush out all the weak holders and those contra players. Both the MACD and Stochastic indicate that Nasdaq Composite current downturn is just the beginning, it still has long way to go before both the indicators show oversold position. 

Based on the above analysis, I would summarize that the recent political turmoil in the middle east is just and valuable and good excuses for the stock operators to swap the position from going long to short. I believe it is just the beginning of their move and more downward punishment for stocks that gained tremendously in the recent term will continue. 

For those who wants to go long, may the force be with you.

DJIA Will Now Tumble to 11,000. Can you handle this?

Is this current downturn in the world stocks market is due to the Libya civil war. The answer is yes and no, but it is more towards the no side.

The answer is yes because it is true that the current Libya civil war is bringing up the price of the oil, however, I do not see the oil price supplies will be substantially affected due to this. This is mainly a speculation and the work of the oil operators to push up the oil price for their own personal gain. Libya is the 15 world tops oil producer, unless Libya is no.1, then it will have a very high impact on the supply of the oil price. However, the oil operators is taking this reason of the civil war to push up the oil price and it indirectly does have the effect on the world stock market.

The answer is no because it is time for DJIA to tumble and to consolidate as it is very much overdue.

Based on the my latest technical analysis on DJIA, I am predicting that it will crash to the 11,000 level. The probability of it happen is very high because the recent upward surge in DJIA is overdone and overprice. It is only fair that DJIA must consolidate back to this level for a fair game. Otherwise, it looks really fake for DJIA to continue to go up without stopping and resting. Imagine, you start running from California State all the way to New York without stopping, can you handle it? DJIA, in this case, can't handle the pressure of its superb upward move.

I am unstoppable and I am going to eat DJIA alive!

Dow Jones- Is this Bull Run Over?

I believe this is a billion dollars question that everybody would like to know the answer. Honestly, I do not have a 100% correct answer, and I can assure you that nobody else have the 100% answer.

I at The Market Oracle will try to give you the best answer possible. I have more than 10 years of Technical Analysis experience, although, I may be wrong at some time, but based on the technical analysis for DJIA(short and long term) below, I hope I can to predict the direction for DJIA going forward.

 Long term technical analysis:

 Click on the above chart to enlarge

Based on the long term technical analysis, DJIA has already broke the long term upward range on June of 2010. However, it manages to find its 1st support and climb back up to the current level of 11,894.
It is currently testing the 1st resistance which I believe will be broken very soon.DJIA is currently consolidating and will be making its upward surge. DJIA will gather its bull strength to test the 2nd resistance which is at the 13,000 level, which I believe will hard to break. The last time DJIA flirt with this level is on May 2008 which is about 2 years ago. And the 3rd and final resistance is at 14,000 which is tested by DJIA on Oct 2007.

Click on the above chart to enlarge

The short term chart shows that DJIA is currently going through a very smooth upward move, 3 of the technical indicators (MACD, Stochastic, and Bollinger Band)  that I have always relied on show a neutral signal. Based on this very smooth upward move by DJIA, I will predict that DJIA will continue its bull run until it hits the 2nd resistance level at 13,000 as similar to the long term chart analysis as per above.

Both long and short term technical analysis show, I will predict that DJIA will continue its upward move until it hits the first resistance at 13,000. If it can break this level, I will predict that it will go to test the biggest and 3rd resistance at the 14,000 level. Once it touches with the 14,000 level, it will hit the climax and will reverse its trend and will go down from there to form a double top formation. 

I hope that this technical analysis will be able to help some of you especially for those who bet on indexes. Good luck and happy trading. 

==================================================

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 

==================================================