Dow Jones Reversing downward....

I was more positive on Dow Jones in my past post Follow up on Dow Jones behavior and comparison with Nikkei and Hang Seng  However, its move this week fully cancelled all my justifications for a bullish tendency.

Fig 1. Dow Jones Weekly Chart

I was watching Dow Jones throughout the week and I did not notice abnormality. Dow broke every moving average support getting in its way. I could not see much in the weekly chart, so I switched to the daily chart for more detail.

Fig 2. Dow Jones Daily Chart

On daily chart, it can be seen that Dow started falling until Tuesday when it was supported by the 21-day moving average and was reversing upward by Thursday.  The plunge came suddenly on Friday and even on daily basis, it broke through all the moving average support levels. What happened?

While I am working on this entry, I come across this video on Youtube.com that explain what is happening, it all ties to the Federal Reserve.

I believe he explain everything about what happened to Dow Jones. 

So what happen next?

I suspect that it may pause in the coming week as many are unsure what just happened, it may even attempt to climb back up but this time the moving average supports turning resistance, stopping its ascend. 

It will then continue to fall after a week or more. 

Using weekly data, the projection support are between 30,672 to 28,442. Using daily chart on the other hand, the most immediate support based on expansion is between 31,930 to 31,375, while projection support at 32,466 to 31,911.

I believe that all other markets are closed when this announce is made. So we may see jitters on international markets on Monday, starting with Asian indices.