Dow Could Bounce

Hello Dynamic Traders.

I am updating my forex blog on Sunday afternoon whilst doing my technical analysis in preparation for the week ahead.

In this economic crisis, last week saw some major down moves on the market and the saying the trend is your friend would lead everyone to continue shorting but I think we might see a bounce this week. A bounce is of course going against the trend not to mention the excess volatility we have witnessed recently and as a result would be a high risk position to take.

Below I have added a monthly chart of the Dow Jones 30. Note the support levels, the 200 moving average and the figure.




Dow Jones (Monthly) Advanced Get Chart

Below is the daily chart of the Dow Jones 30 and you will note the reversal candle. It is also in close proximity to the fib reversal 886 point.



Dow Jones (Daily) Advanced Get Chart

Lastly I have added the S&P 500 daily chart below and again the figure and candlestick reversal shows encouraging reasons for a bounce. Again, we have close proximity to 886 fibonacci.



S&P 500 Advanced Get (Daily) Chart

Don't get me wrong, I still see the markets heading further south unless we have good technical analysis showing otherwise but a bounce looks forth coming.

Right now a lack of trust and fear seems to be a catalyst to the panic we have seen in the markets.

We will have to wait and see if the Governments packages have a positive effect on the markets short term and long term.

I wish you all good dynamic trading...

Javid Shaik
Forex Analyst