Dow Jones Industrial Guest Technical Analysis
This weekend we have some guest market analysis from Mitchell Brousseau who also is known as LikesMoney on the Stock Forum here on the site. After viewing Mitchell’s work previously I asked to see if he would like to provide some exclusive analysis for Stock Trading To Go. He gladly accepted.
The following analysis is of the Dow Jones Industrial and is designed for the technical trader. Mitchell uses a variety of technical tools to analyze the movement of the Dow. Hopefully you benefit from his research.
General Overview
The Dow closed Friday at 8539.73. Overall for the week the Dow fell 2.95%.
Volume
- Overall volume is lower than April & May.
- Volume trended higher this week.
- The higher volume days were Red days — Bearish.
Moving Averages
- The Dow is still above the 50 MA, which is at 8372.78 — Bullish.
- The Dow closed below the 5 MA of 8541.86 and the 9 MA of 8642.40, which is Bearish.
- The 5 MA crossed down through the 9 MA on Monday — Bearish.
- The Dow closed just below both the 200 MA & the 20 EMA.
- Only 10 points separated the 200 MA (8567.06) from the 20 EMA (8577.68).
Daily Chart Analysis
Click to EnlargeMonday the Dow opened above the purple horizontal trendline. This trendline is significant since the Dow has traded below this trendline since 5/19/08. The Dow came crashing down through that on Monday and tested support at 8590. Tuesday, the Dow crashed through the 8590 support level and tested the 8496 level of support. On Wednesday, the Dow found support at 8496. What was support at 8590 now turned into resistance. If the Dow breaks below the 8496 level of support, there is not much support until 8215. On a positive note, the Dow closed the week with a higher High and a higher Low for two straight days.
Weekly Chart Analysis
The Dow Weekly chart was down by 259.53 points or 2.95%.
The Dow was up 12 out of the last 15 weeks.
The Dow was down 2 out of the last 6 weeks.
The Dow had a Spinning Top candlestick for the previous week, which signaled a potential change in trend.
This week’s candlestick was a Bearish candlestick with a lower High and a Lower low.
Volume
- Was up this week, after declining for three successive weeks.
- This could signal the momentum turned Bearish.
RSI
- Ticked lower to 51.31.
- If RSI crosses below the 50 Line — that would be Bearish.
CCI
- Crossed below the 100 line — Bearish.
Stochastics
- Is oversold.
- The Fast Line has crossed down through the Slow Line — Bearish.
- If Stochastics crosses below the 80 Line — That would be very Bearish.
Accumulation/Distribution
- Has set a lower High from the High set in early May.
- Forming a Double Top — Bearish.
- If it breaks below the low set during the third week in May — That would be Very Bearish.
MACD
- The Histogram ticked slightly lower this week.
- Still well over the zero line at 186.253.
- The Fast Line, at -63.17 and the Slow Line at -249.361, are still trending higher — Bullish.
ADX
- Heading lower. It closed at 26.85, suggesting the trend is weakening or consolidating.
- The +DI and –DI are about to cross — Bearish.
Happy Trading.
For more analysis of the market visit Mitchell’s website.
