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…Since February 1st, markets [have] experienced a rather volatile period and it was no exception for both the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA). Our article today will look into why both…are down and most important[ly], what are the crucial support levels investors should watch for. SPX and DJIA Down, what triggered the drop? Stocks had a strong start in 2018, and just as investors were getting more and more complacent,…[the] first market correction hit in a quick and unexpected way. In retrospect, complacency best describes the sentiment in the market towards the end of 2017 and the start of 2018. Back then…it seemed like it was impossible for the rally in the American markets to stop let alone a correction to happen yet the market correction happened… - As markets started recovering, the market took, again, another abrupt turn. Financial news was quick to point out the rising yield as the main factor that spooked investors.
- Later on, they pointed towards the announcement of Trump tariffs on imported steel and aluminium.
- A few days ago, the fear in the market was driven by concerns over a potential trade war with China whom vowed to slap the equivalent tariff on US exports.
SPX and DJIA: The real story is in the charts …Our InvestingHaven research team, however, firmly believes that the most valuable information can be retrieved from charts rather than news. - The daily Dow Jones Industrial Average (DJIA) line chart below shows that the DJIA index is going towards the thin support zone of 23160 ? 23550 for sure within the next 2 weeks. We feel that this thin zone has a large chance of being pierced…
- Our research team, however, is more concerned with the significant support zone of 21210 ? 22240 (±). Should the blue zone break lower, the penultimate zone lies in the 18050 ? 18700 as this is also the former resistance turned support. It is also a major pre-Trump support zone…
Similarly, as seen in the chart below, the same behavior can be observed in the SPX. The thin zone of 2560 ? 2590 looks vulnerable for the next 2 weeks. 2380 ? 2480 will be the critical support zone and this support is breached, the next most important support zone will be 2130 ? 2185. 
Through volatility the most important action is to remain calm to be able to make sound decisions. This will be particularly hard for those who bought at the top. Please discuss with your financial adviser and brokers for more money management and risk mitigation during time of high volatility. Scroll to very bottom of page & add your comments on this article. We want to share what you have to say! Related Articles From the munKNEE Vault: 1. WATCH OUT BELOW: Next Stop For Dow Jones Index? 19,000 Investors have become way too complacent as the broader markets trade near their highs. However, as the markets really start to fall, complacency will eventually turn to panic. According to my analysis, the next critical level for the Dow Jones Index is 19,000. 2. S&P 500 Kissing Underside Of 2 Long-term Rising Channels The long-term trend in the S&P 500 is up and nothing over the past 6-weeks has changed that trend! 3. We Should Expect Higher Stock Prices In the Next Quarter, Mid-year & By the End of 2018 ? Here's Why They say records are made to be broken and, so far, the US economy and stock market are on track to do just that. 4. WARNING: Markets Reaching Extreme Leverage There is an extreme amount of leverage in the markets and, while this leverage may increase for a while, at some point the insanity will end in one heck of a market correction-crash. 5. This Simple Indicator Suggests S&P 500 Still Far From A Bubble …2017 provided many good times [but,] for worriers, the low volatility and steady gains of last year signal bad times are likely in 2018…[and] they have a point. It's true that good times can't last forever. [That being said,] it's also true that we can spot when the good times have gone too far with this simple indicator. 6. Will Similarities Between Trump & Kennedy Rallies Continue & Conclude In A Market ?Slide? In Early 2018? Comparing the Trump and Kennedy rallies?as in the first chart below?I expect Trump's market to build an even bigger slide. 7. Recent Stock Market Returns Are Not Excessive Relative To History? Here's Why US stock market valuations appear stretched, but history reminds us that this form of excess can endure and, with the U.S. economy posting ongoing signs of growth, the market's upbeat profile of late has macro support. Nonetheless, it's prudent to consider how performance stacks up in terms of history. The post SPX and DJIA Approaching Crucial Support Levels appeared first on munKNEE dot.com. |
