How Far Will The Dow Jones, Nasdaq And S&P 500 Fall This Time? October 2018

With the recent crash and sell off one wonders how far Dow Jones can fall. Let us take a look at what the chart is telling us on the possibility of Dow's collapse.

Chart patterns can be very helpful to pinpoint to us the extent of this sell off. When we study the chart of the Dow, it really tells us that there is a lot of weaknesses in the Dow and this index is likely to fall further.

The above is the daily chart of the Dow Jones.

You will notice a few things:

  1. Dow has broken below the 20 MA, 50 MA and 200 MA
  2. There is a bearish cross where the 20 MA cross below the 50 MA
  3. Dow has broken an uptrend line

All these are bearish technicals rearing its head to tell us that there could be more selling.

How do we get a possible target?

Well I would like to take a measured move approach. Some traders may see the pattern as a bearish flag to get a possible target. So if we take the measured move approach we might get a target of around 24000. But with a bearish environment, it is very likely that the selling may continue down to February 2018's low of around 23400.

To get the big picture, let us have a look at the Dow's weekly chart. The stochastics tell us that it is forming a railroad track that still has some way to go before getting oversold. It is possible that it will get oversold when it reaches the support area.

So, when that happens, we will see if there could be a bottoming process forming.

The Nasdaq Composite also tells us the same story as the Dow. It has a bearish cross and has already broke below the 200 MA. A possible measured move target will be around 6840.

The S&P 500 also tells the same technical bearishness as the Nasdaq and Dow. The futures chart show that it formed a topping tail yesterday and has fallen below yesterday's low. So it is possible that more selling will happen today.

Notice how the sell off started with the S&P 500 breaking below and uptrend line and slashing through the 50 MA.

A possible target for the S&P 500 will be around 2600.

I always like to use the 60 min chart of SPY to gauge the short term movement. Notice how the SPY is below its declining 60 min 20 MA, 50 MA and 200 MA. This tells us that the picture is bearish at the moment.

SPY is also in a 60 min downtrend making lower highs and lower lows. A break below yesterday's low will send the market lower.

Summary

The charts of the 3 major indexes are telling us that there is a lot of weakness. Therefore, one should be very cautious in this environment.

Charts with the Freestockcharts.com label are courtesy of Freestockcharts.com

Charts with the investing.com logo are courtesy of Investing.com powered by Trading View

  • If you like this article, consider starting the Stock Market Course. It is free and jam packed with great information for newbies.
  • Want to have updates on the financial markets? Join my Telegram Channel. Dstockmarket Chat Group
  • Help support this page and press the Facebook Like button below. Thanks!

Join Dstockmarket's Facebook Page 

Recent Articles

  1. Technical Analysis Of US Market And Stocks March 2019

    Mar 18, 19 09:23 AM

    Analysis of what is going on in US stock market as well as highlights of some stocks that are forming significant patterns.

    Read More

  2. Technical Analysis Of AAPL : Making Sense Of Apple's Stock Price

    Mar 15, 19 01:07 PM

    Apple is one of those stocks that we should look at almost every day. The reasons is because it is a component of the Dow Jones, the S&P 500 and the Nasdaq Composite. If Apple does well, it will be go…

    Read More

  3. Technical Analysis Of Bahvest (Borneo Aqua Harvest)

    Mar 15, 19 12:59 PM

    Technical analysis and trend analysis of Bahvest stock price. Borneo Aqua Harvest.

    Read More

  4. Technical Analysis Of Dayang

    Mar 15, 19 08:40 AM

    So a friend asked me if Dayang will continue to go up. I guess many are wondering the same question as well. So let's take a look at what the charts are saying.

    Read More

  5. Technical Analysis Of WTK Holdings

    Mar 15, 19 08:30 AM

    Let us take a look at the technical outlook and charts of WTK Holdings.

    Read More

New! Comments

Have your say about what you just read! Leave me a comment in the box below.