Dow Jones Evening of 12-4-2018
Today the DJIA fell nearly 800 points closing at 25,027.07.
This morning I wrote:
Given the past few days movement higher, and considering the part of the cycle the market is in, it would not be too surprising if the DJIA backed down a little today.
The market obviously backed down more than just a little. Today market the completion of one cycle and the beginning of another. With the markets closed tomorrow for President George H.W. Bush's funeral there won't be any trading. However, neither Thursday December 6th nor Friday December 7th would necessarily be expected to experience any dramatic price movement. This would become more likely on December 9th or 10th.
Despite the fact that the exchanges will be closed tomorrow, it's worth noting that fair value is implying a higher DJIA by about 80 points as this is being written. Compared to the almost 800 point drop this is pretty small potatoes.
That implied opening would be enough to move the Dow back above the 25,088 level. The DJIA has been flirting with this level for a while now. Back in October it closed narrowly above that level - 25,115.76. In November the DJIA closed at 25,538.46. A monthly Dow close below 25,088 would put the market in a bearish stance.
In the meantime, once the markets open again on Thursday, it would be worth keeping an eye on the 25,344 level. If the DJIA rejects a cross above 25,344, that could imply further weakness. 25,344 shouldn't be considered an overly strong resistance level, but is useful to gauge the relative strength or weakness of price.
Below 25,0888 watch 24,832 and 24,576. 24,576 marks the boundary between the 7th and 8th levels of the DJIA price. The 7th level ranges from 22,528 to 24,576 and the 8th level ranges from 24,576 to 26,624.
To the upside watch 25,344, 25,600 and 25,856. Above those is 26,624 which is the dividing line between the 8th and 9th (and final of this leg) levels of 24,576 to 26,624 and 26,624 to 28,672.
The DJIA has been perched near the high end of a range beginning at 10,240 and ending at 28,672 for some time now. The market still does not have a clear direction yet, but did reject the higher 9th level of the range after closing at its all time high of 26,951.81.