Recent selling pressure had taken the Dow Jones down into our citied support level of 13121. With a print low of 12975 we may have found short-term support.
It seems that no news is good news for the US markets recently, and a year of sentiment driven markets had finally starting to wane. Oil, Credit woes and inflation worries had finally opened the doors of worry.
With a clear break below Wave 4 at 13407, the Dow Jones Index had taken a toll for the worse.
The Relative Strength Index Sell confirmation has brought the index to the 13121 area where we have a Fibonacci support level. However, as we were witnessing more selling pressure it may turn out that there could be further downside before an intermediate term bottom is found.
Below 13121 which is a Fibonacci 0.618% level, we have the 0.786% level coming in at 12828 and if either of these do not hold, then look for the 122665 area where we have a broad range of support levels tying in together. If the index does reach the latter level, short term buyers could be seen coming in to relieve an â€œoversoldâ€ condition.
With regards to Time Analysis the window of opportunity here is also broad range from November 9th â€“ 20th. With the current position and pattern of the index, the window will be used to find a low spot.
In the near term, if we can climb back above 13265 then this would indicate a low may have formed and upside targets of 13400 would come back into play.
For the intermediate term, we need to see the RSI get back above the Buy side to capitalize on the November to January seasonal strength rally.
Sandy Jadeja is Chief Market Strategist for ODL Markets and founder of www.Spreadbettingtowin.com where he teaches low risk trading strategies and money management.