Wednesday, August 3, 2011

Dow Jones Is Likely To Retest Recent Low Supports of 11822 ( 16 June) And 11548 (16 March), 02-08-2011

Wall Street Recap: Dow Jones tumbles 267 points, logging 8-d losses of 858 points
Despite approval of bill to lift the nation’s borrowing limit and cut spending to avoid a debt default, Dow corrected 267 points to 11867 amid economic worries following the recent slowdown in economic indicators i.e. 2Q11 GDP, July ISM, June consumer spending and in anticipation of a potentially weak ADP (tonight) and nonfarm payroll reports (Friday).

Sentiment were also dampened by the new record high yields for Spanish and Italian 10-year bonds as well as Fitch and Moodys negative comments that the US credit rating may be downgraded on concern that fiscal discipline may erode, further debt
reduction measures will not be adopted and the economy may weaken.

Wall Street outlook: Dow Jones: Bearish sentiment return following the breakdown of major supports
Following the overnight Dow Jones’ selldown, near term Wall Street outlook has turned bearish.

The breakdown of the Head & Shoulder, 200-d SMA (11987) and uptrend line (12100) supports are likely to drive Dow Jones to retest recent low supports of 11822 (16 June) and 11548 (16 Mar), despite oversold position.

Immediate resistance levels are 11987 to 12100.

Daily Dow Jones: Bears Resurrect With The Breakdown Of Head & Shoulder, 200-Days SMA And Uptrend Line Support


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