Where is the Support Line for the Dow Jones

May 4, 2012 by Thomas Mullooly

In this video, we take a look at the POWER of support lines. Some support lines will cause changes in your 401(k) if broken. Support lines often act like brick walls, meaning we tend to get a bounce off a support line. And it takes a LOT to break a support line. Here the Dow Jones is approaching the short term support line at 12850. Being a 401-k advisor in Monmouth County, I know that a break would generate a second sell signal in the near term, and also put the Dow Jones closer to a potential spread quadruple bottom at 12700.

Again, it takes a lot to break a support line. This support line for the Dow Jones has been intact going back to last year. It’s also interesting to note this chart of the Dow Jones Industrial Average has been negative for eleven weeks now, significantly longer than average. The average weekly momentum in either direction, positive or negative is typically six to eight weeks. In these kinds of settings, we usually experience a bounce. But with markets conditions defensive at the moment, we need to be prepared for both negative market conditions and positive market conditions.

Be prepared one way or the other. And call us for fee-only 401(k) advice at 732-223-9000 if you have questions!

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About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.