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Dow Jones Forms Pin Bar Off 200DMA | Oct 9th
Dow Jones Index – Bearish, But Some Potential Bounce Here
Shedding over 1000 points in the last 3 weeks, the major US index has been in a structured non-volatile trend for most of the move, continually forming mild pullbacks into the 20ema and dynamic resistance. In the latter half, the price action remained in a channel which it then broke late yesterday. After a short term rounded double bottom and second attempt at the 200dma (at 14750) the index formed a pin bar rejection on the 4hr chart.
Since then it has formed an inverted pin bar (failed attempt to rally, but an attempt) and is holding above the key support level. I suspect we could see a short term bounce from a) technical models buying off the 200dma and b) an incredibly overdone move with sellers covering off the 200dma. Bulls will need to clear the current 4hr 20ema at 14878 and close above it, which would then put 14945 under pressure being the next key role reversal level.
Should the bears have a 1hr close below 14700, then this would open up a lot of downside with 14550 being up next.
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