Thursday, June 16, 2011
Market Watch: DJIA
The Dow breaks down below 12,000 the headlines say. But looking at the chart it's hard to say what all the fuss is about. While the financial media obsess over round numbers the chart clearly says that 11,500 is the line in the sand.
The index has formed a nice straight downward sloping channel and I would not be surprised to see it drift all the way down to 11,500 before making a bounce. That is not a prediction just an observation. On the other hand if it does drop below 11,500 it could go all the way down to 10,000 before finding serious support.
Actually the DOW is a meaningless indicator, since it is comprised of only 30 stocks. Nevertheless the media hype that the Dow over the broader market indexes like the NASDAQ and the S&P 500.
We can play that Dow Jones industrial average with the DJX. We might be able to catch a nice short through 11,500 or possibly even a bounce off of the same level. Let's wait and see.