Dow Jones Industrial Guest Technical Analysis
This weekend we have some more 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 happily 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 8438.39. The Dow closed down for the day by 34.01 points or 0.40%.
Moving Averages
- The Dow Closed below the 50 MA on Monday, Tuesday & Wednesday.
- The Dow closed above the 50 MA on Thursday and found support at the 50 MA on Friday
- On Friday, the Dow came down to test the 50 MA and then closed above it, which is at 8405.91
- After having the 20 EMA provide support since early March, the 20 EMA is providing resistance.
- Six points separate the 200 MA and the 20 EMA. The 200 MA is at 8494.32 and the 20 EMA is at 8500.48.
- These two MA’s are providing tremendous resistance for the Dow. The Dow would need a big day on Volume to break above this resistance.
- With the 20 EMA, the 50 and the 200 MA converging, the Dow will likely have a sharp break.
Daily Chart Analysis
Click to Enlarge- Big sell off on Monday, over economic concerns. The Dow closed lower by 204 points breaking through the 8496 level of support.
- Tuesday and Wednesday the markets were indecisive, as represented in the upper and lower shadows to the candlesticks on those days.
- Wednesday support was found at the 8259 level.
- On Thursday, the 8259 level was tested again before the Dow closing up 200 points for the day.
- The Dow found resistance at the 8496 level on Thursday, which was support on Wednesday, Thursday & Friday of last week. The Dow closed lower on Friday.
- The Dow appears to have re-entered the range it traded in during most of May.
- Since peaking on 6/11, the Dow has established two successive Lower Highs and Lower Lows – Bearish.
Weekly Chart Analysis
- The Dow Weekly chart was down by 101.34 points or 1.19%. The Dow was up 12 out of the last 16 weeks.? The Dow was down 3 out of the last 6 weeks, being down triple digits two weeks running.
- This is the second week the weekly chart had a Lower High and a Lower Low – Bearish.
Volume - was down this week. Volume is less than half of the peaks from March, April and early May.
RSI – Peaked in early June. Has since trended lower, closing for the week below the 50 Line at 49.75 – Bearish.
CCI - Crossed below the 100 Line to 63.75 and trending lower – 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 - Appeared to be coming off a Double Top last week, which would be Bearish. This week we see Accumulation / Distribution stall and even tick up a tiny bit, no doubt due the big day on Thursday. If it breaks above the recent peaks, that would be very Bullish.
MACD - The Histogram ticked slightly lower again this week. Still well over the zero line at 157.054. The Fast Line, at -53.043 and the Slow Line at – 210.097, are still trending higher, but also appear to be leveling off – Neutral.
ADX – Heading lower. It closed at 25.38, suggesting the trend is weakening or consolidating. The Positive and Negative Directional Indicators have crossed – Bearish.
Happy Trading.
For more analysis of the market visit Mitchell’s website.
