Dow Jones Monthly 38.2% Fib Test
The Dow Jones monthly chart shows price testing support at the 38.2% Fibonacci retracement level in the total Fibonacci range from the 2009 Global Financial Crisis low to the February 2020 all-time high. Price had previously breached the 38.2% Fib level during the initial coronavirus selloff while also breaking below the broadening wedge pattern and finding support at the 50% Fib level which is the midpoint of the total Fib range. Price remaining above the 38.2% Fib level and lower line of the broadening wedge indicates that traders are attempting to keep the overall trend bullish. A breach below the 38.2% Fib level would indicate that traders are losing bullish conviction and that a re-test of the 50% would be likely.
The 50% Fib rests in the same area that price previously topped out at in 2015 as the Federal Reserve began monetary tightening with the first interest rate hike since the 2008 Global Financial Crisis. The main level to watch is the 50% Fib as a move below that level would likely indicate downtrend continuation with a loss of 50% of the gains seen since the 2009 low; a move below the 61.8% Fib level would be confirmation of bear market continuation.
The monthly RSI is below the 50 level which indicates bearish momentum behind price; an RSI reading above 50 is considered bullish while a reading below 50 is considered bearish.
The PPO is declining but remains above the 0 level, though a cross below it looks likely. A PPO reading above 0 is considered bullish while a reading below 0 is considered bearish.
The 50% Fib rests in the same area that price previously topped out at in 2015 as the Federal Reserve began monetary tightening with the first interest rate hike since the 2008 Global Financial Crisis. The main level to watch is the 50% Fib as a move below that level would likely indicate downtrend continuation with a loss of 50% of the gains seen since the 2009 low; a move below the 61.8% Fib level would be confirmation of bear market continuation.
The monthly RSI is below the 50 level which indicates bearish momentum behind price; an RSI reading above 50 is considered bullish while a reading below 50 is considered bearish.
The PPO is declining but remains above the 0 level, though a cross below it looks likely. A PPO reading above 0 is considered bullish while a reading below 0 is considered bearish.
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