Santa's Crying in His Milk and Cookies. DJIA Morning Update for 12-18-2018

Santa's Crying in His Milk and Cookies. DJIA Morning Update for 12-18-2018

Nothing Ever Has to Happen, but it Looks Like the DJIA Might Catch a Bounce Today

Santa Claus Too Depressed to Rally?

Santa has been crying in his milk and cookies as stocks in December are off their worst start since the Great Depression.

...aaaand It's Gone...

December's Santa Claus Non-Rally has helped push stocks deep into correction and even bear market territory for the Russell 2000:

Dow -12.7% from highs (correction)
S&P -13.7% from highs (correction)
Nasdaq Composite -17.3% from highs (correction)
Dow Transports -19.4% from highs (correction)
Russell 2000 -20.6% from highs (bear market)

Enter the Bounce?

via GIPHY

Does the old market jalopy have some bounce left in it - at least enough for today? It looks like it does. The DJIA Futures Fair Value currently show the Dow opening up over 200 points to over 23,800. 23,808 is between the extreme lows of the DJIA for 2018 and psychological support for the market near the 24,000 level.

In the larger context, the DJIA is trading within its 6th level of 9 - giving it a long-term trading range of 12,288 to 30,720. Here are the levels to give some context.

12,288 to 14,336
14,336 to 16,384
16,384 to 18,432
18,432 to 20,480
20,480 to 22,528
22,528 to 24,576
24,576 to 26,624
26,624 to 28,672
28,672 to 30,720

The 6th level (or more precisely, somewhere between the 5th and 6th levels) typically results in increased momentum for the market price. This applies both as markets move higher or lower. But it would not be surprising for the market to see some level of support given by this 6th level - at least temporarily. On further price erosion, we should keep our eyes on 22,784. A monthly close below this initial downside target could lead to a substantially larger decline than what we have already seen thus far.

Markets Projection for 12-18-2018