The DJIA index hit its lowest level since June 26th today. The large cap index has actually been much weaker than the S&P 500, Nasdaq or Russell 2000 in the month of August. It is now only about 300 points above the crucial 14,500 support level, which has held ever since the DJIA broke out above its 2007 all-time high in March:
That 14,500 level is just above the fast approaching 200 day moving average, so it holds added importance. It’s notable that this index had already broken its 50 and 100 day ma’s prior to today, while the other U.S. equity indices test those moving averages on today’s weakness.
Going forward, 15,000 is likely to be stout resistance, while I’m watching the 14,500 area as a short-term downside target for this pullback, or at least an area where buyers get a bit more aggressive with that longer-term support in mind. If that coincides with IBM, one of the major DJIA components, near the $180 level (which I discussed yesterday) , it might be worth a shot on the long side.