DJIA Study, SDOW

 

Keeping in mind our June 16 post "DJIA Quarterly Momentum Chart Update, VXX, Buying SDOW", and the likelihood of this week's "Brexit" vote causing a drastic emotionally-based market swing, we add the following observations.

Here's a long-term chart of the DJIA showing a possible rising wedge pattern broken:

Next we illustrate the resistance level in effect for more than the past year (all-time high was 18351 in mid-May of 2015):

Below is a chart of SDOW.  The red line represents our suggested stop level of "below $14.50";

If the Brexit vote is to "remain", it's expected that there'll be a positive market reaction.  We'd feel very differently, but cannot vote on the matter or make the market go in the direction we feel makes sense.  If markets do jump in response to the vote, it should prove a short-lived rally lasting days or weeks. 

In that scenario, the DJIA would probably approach its resistance level.  It may even exceed it, with the ultimate high probably occurring near the lower line on the "rising wedge" chart at top of the post. 

SDOW would be stopped out and we'd re-enter it once it closes above the black down-trend line shown on its chart above. 



 

 

 

 

 



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