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DJIA In Position To End 8-Day Losing Streak

Headlines throughout the financial media allude to the DJIA being in the midst of its longest losing streak in 40 years. The daily string of red candles counts eight, with the term “correction” creeping into the lexicon of most analysts.

As of press time, the streak is in jeopardy. The DJIA is up over 150 and the S&P 500 eleven. A muted second-half of the trading day will bring the U.S. indices a much-needed green close.

DOW Technicals

Pending trade wars are being given credit for the bearish pressure in equities of the last two weeks. One look at the daily chart for September DOW futures illustrates how serious the damage has been.

September DOW Futures (YM), Daily Chart
September DOW Futures (YM), Daily Chart

Friday sessions are always a fascinating case study. Big money players often tip their hand — risk tolerance becomes a bit more obvious than usual. For today’s market, bargain hunters appear ready to go home for the weekend long U.S. equities. We will see if this holds up as the closing bell nears.

Levels to watch for coming sessions:

  • Resistance(1): 38% Current Wave Retracement, 24791
  • Support(1): 78% Macro Wave Retracement, 24517

Bottom Line: Personally, I have no desire to go home long the indices. However, a sell from topside resistance is desirable if it presents itself by session’s end.

Sells from 24784 with an initial stop at 24806 are an affordable way to fade a bullish close. Using a basic 1:1 risk vs reward, this trade produces 22 ticks on a bounce off of resistance. As always, trade smart and for next week’s open!

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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