The indexes bounced instead of break my supports. This changes the outlook for the next 2 days from bearish to bullish. It seems that we are going to get that long-awaited bounce before the final tank. The upside targets are 10,350 for the Dow, 1,098 for S&P and 2,200 for NASDAQ. These targets should be hit in the next 2 days. We would be continuing our downtrend from Thursday onwards. With the non-farm payroll coming up on Friday, I believe this downtrend should not be too difficult to resume.
This is a wave 2 on this downtrend where I believe we should be moving back to the weekly 50 SMA for all three indexes.
Dow weekly chart (red line is the 50 SMA)
S&P weekly chart (red line is the 50 SMA)
NASDAQ weekly chart (red line is the 50 SMA)
I believe eventually (in 1-2 years time) we would be breaking the March 2009 lows. So brace yourselves for another round of wage and job cuts.
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