Market Commenary
Dow Jones Industrial Average
The Dow lost 172.93 or 1.6 percent on Friday and closed at 10,817.65. It was down 4 percent for the week or 15 percent since July 21, some 4 weeks 1 day.
After a brief rebound last week, the Dow has reversed and is now retesting the support at 10,588 ( which is the Head & Shoulder break down target ). There are two scenarios :
1. The Dow survives the support level at 10,588 and form a small double bottom. When this happens, we may see a more sustained rebound since the Dow is quite oversold;
2. The support level at 10,588 is penetrated decisively. When this happens, we will see 9,600 which is a Fibo 50% support level
It is not easy to predict the market direction as it is behaving like a wild monkey jumping up and down. We shall see how it is going to unfold itself. Bottom line, 10,588 has become the most important defense.
The Dow lost 172.93 or 1.6 percent on Friday and closed at 10,817.65. It was down 4 percent for the week or 15 percent since July 21, some 4 weeks 1 day.
After a brief rebound last week, the Dow has reversed and is now retesting the support at 10,588 ( which is the Head & Shoulder break down target ). There are two scenarios :
1. The Dow survives the support level at 10,588 and form a small double bottom. When this happens, we may see a more sustained rebound since the Dow is quite oversold;
2. The support level at 10,588 is penetrated decisively. When this happens, we will see 9,600 which is a Fibo 50% support level
It is not easy to predict the market direction as it is behaving like a wild monkey jumping up and down. We shall see how it is going to unfold itself. Bottom line, 10,588 has become the most important defense.
Straits Times Index
The STI is mirroring the movement of the US market. There is not much point analyzing it independently. That said, we shall watch whether the last significant low at 2,720 is taken. If it does, we will be looking at 2,600 ( Fibo 38.2% ) as the next target ( This level is coincide with the magnitude of the 2008 first leg plunge depicted by the vertical golden color line ).
Labels: Market Direction
posted by Market Wizards @ August 20, 2011
Comments: 0
