Dow Jones for a much needed correction
As you guys may be aware of, the stock market has a whole has been breaking all-time highs and setting records nearly every other day it seems. Besides the fact that the market is way overstretched and in need of a correction, there are many other technical factors that indicate that there will be heavy downwards movement. US30 has just closed with a daily bearish candle with substantial size in comparison to the last twelve candles that were either bullish or dojis. Through constant observation of the index, I've realized that a sharp downwards move usually follows after a large bearish daily candle closes near all time highs. Thanks to mass Euphoria and the bubble like state the market has been in, US30 has been able to trade above 31300 for the past 6 days. There has been a lot of indication of massive bearish pressure around these highs with these massive downwards wicks within these zones. The market seems to have topped around 31711 as it has pulled back more than 250 points after touching that price area. US30 has just broken out of a huge rising wedge on the four hour timeframe and is showing a huge bearish divergence on both the four hour and daily timeframe. As indicated by my projection tool, there are many gaps that need to be filled as well. There is also a lot of fundamental factors that may incite fear in these markets. Continuing rising Covid-19 cases/deaths with slow vaccine rollouts, unemployment rates, and more possible power outages may create mass panic, especially after investors may start to see the market beginning to retreat from these highs. This may be the beginning of a much needed 6%-7% correction to return to more logical levels. Ultimately I believe the this index will drop about 2000 points all the way to around 29426 before continuing upwards again. I am already in a few sell positions and I'll be setting my first targets around 30806 and second targets around 30122.
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