Dow Jones 30 Forecast Today - 07/08: Seeking Support (Chart)
(MENAFN- Daily Forex)
The first thing I notice is that the market is trying to do everything it can to find its floor. If that's going to be the case, then we will need to reconquer the trend line that we just broke through, and perhaps even more importantly, take out the 50-Day EMA above, which is of extensively the same thing as saying break the highs of the Monday session. This is a tall order, so I think at this point in time you have to be very cautious as we are at a major point of inflection.
For what it is worth, it looks like we are hanging around the 39,000 level, which of course in and of itself will have a certain amount of psychology attached to it. That being said, this is a market that I think if we continue to see a lot of volatility around the world, the Dow Jones 30 will follow right along with it. Unlike some of its contemporaries in the United States, this is an equal weighted index, so when it falls, it shows you that there is a lot of ugliness all around the markets.
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This trend line that we are sitting on for me is a major inflection point, because it is essentially halfway between the 50-Day EMA above, and the 200-Day EMA below. With that being the case, I think you have a situation where traders will continue to look at this through the prism of a market that is trying to find its footing, but also has to deal with the fact that we are more likely than not going to see some type of recession in the United States. The question of course is going to be whether or not that recession is something rather ugly, or if it is something rather mild. The latest economic indicators suggest that things are decelerating as far as growth is concerned, and one would have a hard time believing that the Dow Jones 30 will escape some of the negativity.
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