DJIA Technical Update 09-30-2022

September 30, 2022?by?Doug Sooley

TECHNICAL ANALYSIS

The DJIA saw a minor reprieve form the selloff in the critical timing window outlined in the last update and plunged again late in the week to close down 2.93% for the third straight week of steep declines on the weekly. For the month of September, the DJIA was down 8.84%...the worst monthly performance since early 2020. Prices have now entered the long-standing gap area on the weekly that runs from 28902 to 28495. The DJIA is now down 22% from the record high close set on January 4th of this year. The daily is oversold while the weekly is just hooking lower in the stochastics with the past three weeks of nearly straight down trade. The market enters October in an extremely vulnerable position and even though sentiment remains bearish, it has not reached extreme levels.

DJIA Monthly H-L-C

From a technical standpoint, as noted, the DJIA is now testing the gap area at 28902 to 28495 that has stood on both the daily and weekly charts since November of 2020. Remember that there is now a weekly target of 26982 for the DJIA. Support is near-term at 28495. A breakdown under 28495 opens counts to 27583. Closes under the 27583 area will open counts to the intermediate-term target area at 26982 with key support at 27136/27043. A breakdown under 26982 sets up a test of monthly support at 26143 with support at 26690.

Short-term resistance is 28970/28975. Rallies over 28975 should take prices to the 29135/29155 area. Closes over 29155 are near-term friendly and set up 29264 with counts to pivotal near-term resistance 29393/29400. Prices need to clear 29400 to show any signs of bottoming and that sets up a test of 29516 with counts to 29811. A drive over 29811 is short-term bullish and suggests a drive to 30030 and possibly 30162. Closes over 30162 suggest 30306 with counts to key daily resistance at 30609.

Charts courtesy of CQG