As we mentioned yesterday, the Dow was very likely to test critical support at 8,000, as seen in the Daily Chart. This is basically the third test on these lows since October, with each successful test leading to a massive upside reversal.
The Dow has now added much more validity to the 8,000 support level, which is the major zone to watch for a confirmed downside break ahead. If this level is crossed with force, we could be on our way much lower in this index, likely back toward the 6,500 level. Continue to watch this zone carefully.
In the meantime, the Dow has embarked on a strong, near-term rally from 8,000 support. This rally could push this index back toward the top of the developing trading range at around 9,500. Look for the Dow to continue pushing toward this near-term target.
to watch this zone carefully.
In the meantime, the Dow has embarked on a strong, near-term rally from 8,000 support. This rally could push this index back toward the top of the developing trading range at around 9,500. Look for the Dow to continue pushing toward this near-term target.
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