Stock Market Analysis – Thursday 25th October 2018

Spread the love

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.

S&P 500

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.

NASDAQ 100

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.

Conclusion

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!

6 Replies to “Stock Market Analysis – Thursday 25th October 2018”

  1. Well October has been terrible for me – like it has for most traders, but thankfully, I trade without leverage so I have been able to hold…and now it’s just a waiting game. 

    Why is October always the same? Is it due to earnings reports? Trump’s Tweets or just the fact that December is coming in soon – I really don’t know why bulls even bother turning up for this month! 

  2. Hi!

    Thank you for the in depth stock market analysis on the DOW sell off! I have never really understood the stock market. But with your descriptions it was easy to follow and understand!

    Thanks for this post!

  3. I think the DOW will bounce back at 24500. It is a strong support level and completes a pattern formation on the daily chart. Also since after 27 Oct is historically bullish. 

    As for the NASDAQ 100, bullish divergence is a positive sign and boosts confidence. But I will be waiting for more confirmation signs. 

    To me the S&P 500 is messy right now and I don’t want to get involved.

    Thanks for the analysis. I’ll keep on checking the market.

  4. Hey there,

    I have to say, this is very detailed and informative stock market analysis, You’ve done a great job!  I really admire the amout of visual information presented here with these diagrams, they truly help a reader to understand the whole movement of market better and it also makes for some very comfortable & user-friendly comparisons between different days/months!  I was quite surprised to discover how suddenly the selling force sky-rocketed in a later day of Wednesday in comparison to its beginning. Keep up the good work!

  5. I don’t know much about of the stock market but with your article I will check it out you open my eyes about it.
    Is it possible for me to learn about it if I don’t have any background?

  6. Ive recently been looking into the stock market. It definitley seems like a scary field to be in. But scared money dont make money. I do have a friend that’s working it seemingly well. I’m definitley going to direct him to this article. I also appreciate your honesty about being reluctant to offer tips during the current status.

Leave a Reply

Your email address will not be published. Required fields are marked *