After the recent decline in prices, many investors start connecting an impeding Eurozone collapse with another bear market, similar or even bigger to that of 2008. DJIA looks like it is falling impulsively. Prices have fulfilled 5 waves down from 13661 high. For many this is just wave 1 of a larger downward move. Apart from that scenario we have to take into consideration the wave count that this new high was just an irregular B wave. Therefore the entire correction ending between 50% and 61,8% retracement could already be over. Even if it is not over, a pull back upwards is expected as part of wave 2.
Looking at the above longer term chart, we see that DJIA is near or just above critical long term support levels. 12700 level is important and should not be broken for bulls to have viable chances that the trend will resume upwards soon.
Prices falling below 12650 and remaining under 12850, would decrease bullish chances and push prices even lower.
Generall strategy regarding this index according to our analysis would call for covering short positions and taking profits.
Thank you for taking the time to read my new post.
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