Dow Jones Industrial Average Sell-Off may Test August 26, 2010 Lows of 9,985
The Dow Jones Industrial Average (DJIA) and the rest of the major stock indexes just had one of the steepest one day declines since the May 6, 2010 “Flash Crash” occurred.
At this time, there are many sell signals that have triggered — everyone is talking about the big head and shoulders top pattern that triggered two days ago (August 2, 2011) on the daily chart and other investors are talking about the Dow Theory sell signal that triggered Thursday (August 4, 2011) when the Dow Jones Industrial Average and the Dow Jones Transportation Index made new lows.
This stock market looks to be in trouble and the upside looks somewhat dreadful, to say the least.
The fundamentals are rough, with an economy puttering along at stall speed, vulnerable to the next shock — such as the U.S. Debt Credit Rating Downgraded by S&P on Friday.
The only positive sign for these markets is that they are very oversold and often oversold markets will usually have a dead cat bounce tied to them — one that could rally the indices 3% to 5% but investors are planning to sell it as soon as they can.
An important note is that the Dow Jones Industrial Average has declined 1,236.55 points in just eleven trading sessions. If the Dow level fails to hold 11,444.61 over the next couple of trading days Monday (August 8, 2011) or Tuesday (August 9, 2011) then the DJIA could plunge even further.
The Dow has had an enormous decline in such a short about of time and at the moment, the “Dow Jones Industrial Average Crash” appears it will test its (November 30, 2010) low of 11,006.02 and if that doesn’t hold — watch out for the (August 26, 2010) low of 9,985.81 which would send the Dow down another 1,458.80 points from Friday’s (August 5, 2011) close which would put this market officially into “Bear Market” territory.
Tags: August 4 2011, August 8 2011, Bear Market, Credit Rating, Dead Cat Bounce, DJIA, Dow, Dow Jones Industrial Average, Dow Jones Industrial Average Crash, Dow Jones Transportation Index, Dow Theory, Downgraded, Flash Crash, Head and Shoulders Pattern, Investors, New Lows, Oversold, Plunge, S&P, Sell Signals, Stock Market, US Debt