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Dow Chart Points to More Trouble

By The Chartman FOXBusiness

I’m writing this a bit early (about 2:15 ET), so I don’t have exact figures. But, I can tell you this: the Dow is in real jeopardy right now. Down about 322 points, it’s almost at the exact bottom of the large sideways movement stretching back to early August.

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The problem is that sideways action broken to the downside on heavy volume, usually implies another leg down. It’s not a certainty of course -- nothing in the market is – but my guess is that if it happens, the 2010 lows come into play. Think Dow 9600.

Of course, as I write this, that support hasn’t been broken and volume certainly isn’t high. But check back post-close and see if those happened.

As for individual stocks, I’m still looking to buy on 10% pullbacks, but most of my favorites aren't there yet. MCD (MCD) is getting close, and for those who ask: yes, I still eat there. (However, only after bike races and only about 6x per year.) Still, I love the company and will get long  in the low 80s.

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Finally, for those who are completely disgusted with the economy, the dollar has other ideas. In fact, it’s been so strong lately it’s broken its downtrend and looks to be headed up further. Granted, it’s a touch overbought, but if it pulls back a bit, look to start buying.

What do you think?

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