The Dow Submits To Might 14K!

There was no surprise in what the Dow did today. As I mentioned yesterday, all technical indications shows weaknesses on all fronts, the kind of weakness that will take a "miracle to break the 14000 resistance level" and it turned out that we are right again. The Dow slided a spectacular 226.47 points in a single day, making an 9 days low. So, is this drop enough or is there more to come? Well, we found the answer by looking at the weekly charts... an answer which we have been talking about for weeks... the Weekly 30MA. Never is the Dow able to trade much higher this far away from its weekly 30MA line and this time round, it is not making an exception. I would think that the Dow would either trade sideways for the weekly 30MA line to catch up or correct down to the weekly 30MA line before rebounding. The latter would feel like doomsday as the Dow needs to drop a grand 750 points! I would think that the sideways scenario is more possible. By sideways, I would speculate that the Dow would trade within a 13510 - 13970 channel. I hope you guys are already fully hedged.


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