Stock Market Analysis
There was a pretty big selling on Wednesday 24th October 2018 on the DOW JONES, The DOW was down 600 points and as discussed previously see post from 22nd October 2018, we predicted a sell off previously on Monday morning.
We can see the selling on Wednesday with the long lower shadows below, the day looked pretty normal then suddenly the selling force came in a bit late in the day.
The confirmation of the sell off can be seen looking at the intra-day chart. The pattern shows the selloff occurred close to the end of the day with some buying creating the long lower shadow.
At the time of posting, the DOW JONES Futures are up and implies to open at over 100, S&P, Russell, and NASDAQ futures are all opening high. as we previously discussed, I suggest we are getting close in the series of selloffs. We have hit the first DOW JONES support at 24,500 points and the next support if the sell off continues is at 24,000points. There will be lots of support at 24,500 be aware of this.
I know there are a lot of concerns with news headline but the market did not sell off because of the news headlines or fundamental issue such as the pipe bombs etc. Take confidence in the fact that the sell off is almost over and the bright side is in view.
The moment the news becomes most bearish that is the time to start buying. There may be a rebound starting from Friday if we have a bullish candle during Thursday’s trading session.
Watch out for a rebound to resistance at 25,500points and then a sell off again giving a lower low, lower high. The point where we get such lower low and lower high is a place to worry. At this moment the support target to look out for are 24,500 and 24,000 points.
We are at support for the S&P 500 with trading closing at around 2650 and next support point is 2600 points. I expect Traders to hegde open positions during these natural moves. Similar to the DOW watch out for a bullish candle with extreme volatility.
In the VIX, volatility is expected to be lower than the February 2018 when we had the sell off. I expect you not to over react.
The NASDAQ is also at support 7300 with next support at 7000 closing below 6800 maybe concerning. Our stochastics oscillators and a bullish candle on Friday in this manner results into a bullish divergence.
There will be further sell off in the coming week but November and December we will see rally with the bulls coming in and gives opportunity to buy. The market outlook is a below average risk and with seasonality October 24, 25 and 26 are historically bearish and then turns bullish afterwards from the 27th October. The month of November and December are historically bullish. I hope these raised your hope n the Market.
Be confident all hope is not lost in the market.
Happy Trading week and if I need to correct anything in my analysis I will do so as soon as it comes to my attention. I am reluctant to give trading tips because of the uncertainty in the market. So hopefully I will make up for this when the market is stable.
See you soon!