It Took the Threat of Nuclear War to Send the Dow Down 100 Points Today
Thu, Aug 10, 2:31 PM ET, by Corey Rosenbloom
I’m joking of course but doesn’t it feel that way?
With rhetoric ramping up over North Korea, maybe that was the only thing that could send this market even slightly lower from its non-stop bullish uptrend.
Let’s update our chart and note what’s happening with the Dow Jones at a key price target:
The Dow Jones “melted” up through the beginning of August, notching 10 up-days in a row.
That’s a long streak and price was “due” for a pullback as we highlighted last week for you.
We’re seeing a natural, normal, and expected pullback toward the rising 20 day EMA.
It just so happened that the North Korea headline news occurred during the pullback.
We should have fun trading markets, and it sure does feel like this pullback is the market saying “Hmm. Wouldn’t it be bearish if we ramped up a nuclear war with North Korea?” It certainly would be bearish.
So here we are at a critical “make or break” support target.
As usual, get ready to frame your next trades in terms of the departure from the rising 20 day EMA near 21,850.
Play bullishly for a simple pullback/retracement if above it or bearish for a deeper retracement toward the rising 50 day EMA – roughly 21,600 – if beneath it.
And… keep watching the headlines. SOMETIMES, they actually matter.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
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