DJIA Market Snapshot: An occasional examination of market characteristics that could shape portfolio construction decisions, from CMG Capital Management Group.
Rally Targets on DJIA
Testing support at DJIA 16000. Support (red line at 16000) held last week.
First rally target is 16666 (light blue line). A break above will likely send the the DJIA to 17100 – 17400 (darker blue line).
The red down arrow marks the famous “death cross”. This is the point that the shorter term 50-day moving average line dropped below the longer term 200-day moving average line.
I believe we remain in a cyclical bear market down trend (see Trade Signals). A “sell” or “hedge” the rally environment.
Typically, when prior support breaks (ie: the 17400 level in chart above), a rally up to test that break often occurs. I suspect that it is what we’ll see. No guarantees of course.
Stay tactical, hedge equity exposure and use rallies to raise cash. – Steve Blumenthal