Dow Short?

6 июн. 2019 г.

Uncertainty in the market is evident in the Dow . RSI has steadily declined while we nearly made new highs back in April. Moreover, the 50 day moving average (not shown to make the chart a little easier to see) has all but crossed the 100 day and is taking aim at the 200 day moving average. The chart pattern resembles a head and shoulders pattern, and the RSI's lower highs strengthen this argument. Trade wars, tariffs, Trump's twitter account, and Fed uncertainty make a short very reasonable. I've a few chart indicators that justify my reasoning.
-RSI's lower highs
-Converging moving averages
-Possible H&S pattern
-DJI has been over-extended for some time and recently broke the blue trend line (again) and may retrace back to previous trend (orange lines)
-Fib retracement lines have been proven resistance points since January 2018. If DJI breaks the 23.6% retracement, I'd be looking at 38.2% and 50% next.
-Recent bounce was a gap filler, of news that never happened (Mexico tariff deal and China negotiations).

Feel free to check out some of my other ideas. I'm looking to provide TA on a weekly basis going forward and would love feedback.

9 июн. 2019 г.

Заметка

Well, two days after publishing this it appears Mexico has agreed to Trump's terms to avoid the 5% tariff. Barring any unrelated negative macro economic news, this will almost certainly result in a very green day on Monday. DJI may soon test all time highs unless negotiations with China continue to sour the market. Based on the recent news, I would be careful shorting DJI.