SubscribeMore Weakness for the Dow Jones Industrial Average (DJIA)
I’m guessing many of you out there are scratching your head with what’s been going on in the market recently.
After the initial drop in mid July, the DJIA flagged sideways, teasing investors who were just thankful the bleeding stopped. How little did the investing public know that this was a temporary pause for another inevitable slide to 12,750.
Recent activity has me preparing for what may be an additional 600-point drop in the Dow over the next couple of months. In my estimation, the markets are getting knocked around early in an attempt to make a grand move leading into the holiday season.
Right now this major index is sitting right on support at 12,750. This is untested support, so I would not place too much faith in a short-term recovery.
Let me explain.
Take a look at the MACD indicator. You can see where I highlighted the divergence, marked by a black circle. We are likely to see this indicator freefall over the next month or so, leading to further weakness in the Dow.
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