Dow Futures Down as DJIA Selloff Has More Room to Run
Thursday,24/03/2016|11:08GMTby
DailyFX News
Talking Points -Dow Futures down 0.5% after 2 days in a row of losses for DJIA -Triangle pattern is ...
Talking Points
-Dow Futures down 0.5% after 2 days in a row of losses for DJIA
-Triangle pattern is our analog for price suggesting another 5-7% selloff
-DJIA support near 16,500 and possibly 15,750
Dow futures are down about 0.6% this morning after 2 days in a row of losses for DJIA. The anticipated reversal for Dow Jones appears technical in nature such that a host of resistance was seen as profit taking opportunity on the 14% run higher since February 11.
The pattern we are using as an analog is a triangle pattern (see idealized pattern below). This would suggest Dow Jones gives back about 5-7% of the gains which may open the door for another bullish run in the coming weeks.
On Tuesday, we identified target levels 16,500 and 15,750 for a selloff on the US30, a CFD which tracks the DJIA. 16,500 is where the 200 day simple moving average resides. A more aggressive lower level of 15,750 is watched if the February 11 low were tested.
The sentiment of traders in the US30 show bulls are rushing in while bears head for the exits. Long positions are 41.5% higher than yesterday while short positions are 16.7% lower during the same stretch. This provides another clue that the selloff may have some legs as traders typically position on the wrong side of the trade.
Dow Jones (ticker: US30) Selloff Has Room to Run
Created using FXCM’s Marketscope charts
We never know for sure if the anticipated move will work in our favor. For the time being, risk levels can be set at 18,000 and we’ll look to lower the risk to better than break even if the DJIA continues to fall.
If we are completely wrong and prices were to accelerate above 18,000, then we might consider a stop and reverse to position to the long side. If we move closer to 18,000, we’ll share the alternative pattern as the triangle would be invalidated.
Lastly, be mindful that trading on NYSE will be closed on Good Friday, March 25.
-Dow Futures down 0.5% after 2 days in a row of losses for DJIA
-Triangle pattern is our analog for price suggesting another 5-7% selloff
-DJIA support near 16,500 and possibly 15,750
Dow futures are down about 0.6% this morning after 2 days in a row of losses for DJIA. The anticipated reversal for Dow Jones appears technical in nature such that a host of resistance was seen as profit taking opportunity on the 14% run higher since February 11.
The pattern we are using as an analog is a triangle pattern (see idealized pattern below). This would suggest Dow Jones gives back about 5-7% of the gains which may open the door for another bullish run in the coming weeks.
On Tuesday, we identified target levels 16,500 and 15,750 for a selloff on the US30, a CFD which tracks the DJIA. 16,500 is where the 200 day simple moving average resides. A more aggressive lower level of 15,750 is watched if the February 11 low were tested.
The sentiment of traders in the US30 show bulls are rushing in while bears head for the exits. Long positions are 41.5% higher than yesterday while short positions are 16.7% lower during the same stretch. This provides another clue that the selloff may have some legs as traders typically position on the wrong side of the trade.
Dow Jones (ticker: US30) Selloff Has Room to Run
Created using FXCM’s Marketscope charts
We never know for sure if the anticipated move will work in our favor. For the time being, risk levels can be set at 18,000 and we’ll look to lower the risk to better than break even if the DJIA continues to fall.
If we are completely wrong and prices were to accelerate above 18,000, then we might consider a stop and reverse to position to the long side. If we move closer to 18,000, we’ll share the alternative pattern as the triangle would be invalidated.
Lastly, be mindful that trading on NYSE will be closed on Good Friday, March 25.
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🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
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Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
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