52 Week Low Another Support

You may be wondering why all the hype recently from the Dow Jones Industrial Average’s (DJIA) drop yesterday, why it was such BIG news? Well it is from breaking one final major support, the 52 Week Low.

THE final support of any stock or index is the 52 week low, the majority of the time a rebound will be set off when the price reaches this level; however in some cases as what happened yesterday with Oil reaching over $140 an all time high and all the economic woes being thrown about and inflation being up, the support could not hold. So yesterday was big news as the DJIA took the plunge and closed below the 52 week Low and today it is still making new lows at the time of this writing it is another 60 points down.

For us that trade the SPX we still have not broken the 52 week low however if the Dow continues its decline which I assume it will especially after testing the previous support and falling back quickly, it will soon be breaking its 52 week low which is at 1256. With the market the way it is and a soft resistance at 1300 we could start looking for Bear Calls just above the 1300 point, just remember that this is a soft resistance and can be broken easily on a turn around.

52 week low, DJIA, resistance, spx, support