Dow 390 pt Sell Off After Large Engulfing Bar | June 20th
Dow Jones – Sheds 390 pts Post FOMC
Clearly the markets did not like Bernanke suggesting Fed tapering will end. If you think equity markets are about fundamentals or earnings, then you don’t understand the role the Fed has had in
rigging propping up the US markets. Bring in the taper and we get the largest loss since Nov. 2011.
Selling heavy yesterday post FOMC, the Dow Jones formed a large bearish engulfing bar, and hasn’t looked in the rear-view mirror since. For the entire uptrend this year, each dip was bought, but this is the first time a dip has been bought on a pierce below the 20ema, without making new highs. I think this = the yearly uptrend is over (unless Bernanke un-tapers).
So I’ll look for sell signals around 15115, 15045 and 14871 (if there is weak pullback). Downside targets will be 14685 and 14475. Only a close above 15115 changes my bearish bias.
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