Pullback Starts At Last...
The widely anticipated technical pullback in the US market begins at last with the Dow following up on last week's drop to downside by 200 points today.
Yes, today's move has nothing to do with news. Economics numbers haven been upwards looking so far with only small pockets of pessimism. This is the widely anticipated pullback that will tell us if this is a bullish reversal we are witnessing or simply the primary bear trend resuming its downwards course.
According to the Dow theory, a bullish reversal is only confirmed if the Dow does not make a new low on this pullback and then rebounds to new highs. Short term support is around the 7700 region. Sad to say, the 200 days moving average won the battle this time and it will be up to the rebound to challenge it again. The Dow had a good run so far and is way overdue a break like this.
Yes, today's move has nothing to do with news. Economics numbers haven been upwards looking so far with only small pockets of pessimism. This is the widely anticipated pullback that will tell us if this is a bullish reversal we are witnessing or simply the primary bear trend resuming its downwards course.
According to the Dow theory, a bullish reversal is only confirmed if the Dow does not make a new low on this pullback and then rebounds to new highs. Short term support is around the 7700 region. Sad to say, the 200 days moving average won the battle this time and it will be up to the rebound to challenge it again. The Dow had a good run so far and is way overdue a break like this.
posted by Jason Ng at 6:01 PM
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