Stocks have been hit pretty hard this week and it is time to look at
some charts to see if we can see any levels of support if we continue
to dive southward.
First, we will look at a weekly chart for the
SP500. After briefly breaking above the 200-day moving average the
SP500 has been in a nose dive. We broke through the 50-day moving
average 3 weeks ago and are now well below that level. The next support
level looks to be around the 1325 area and if we break through that
level look for support at the 1285 area. I of course hope we do not
need to worry about that but I wanted to point it out.
Second,
we will look at the DOW Industrials chart. As with the SP500, we broke
through both the 200 and 50 day moving averages and are well below
those levels. The support line for the DOW looks to be around the 11800
level and that would meet the February/March lows. The Stochastic line,
when looking at the weekly chart, has been a pretty good indicator on
when to buy these dips. As the fast line has broke through the 20 band
in the recent past, it has been a good time to get back into stocks.
The fast line is sitting at 31.58 right now so it will definitely be
something I am going to watch.
The
last chart I wanted to look at was the NASDAQ, which has had a pretty
good run since mid-March. It had trouble breaking away from the 200-day
moving average and had hung around that level through most of May. June
arrived and the index dropped not only below the 200-day but also the
50-day moving average. Hopefully we can hold steady here and start a
move back up shortly.
You
will want to keep your eyes on some of those support levels to see if
we can rebound off them. Stocks are under some pressure now, but
knowing when to get in and out is how you make your money. The charts
can sometimes help us with this process.