Nothing Goes Down In Straight Line
The major stock indexes have plummeted sharply lower over the past two weeks. This morning, the Dow Jones Industrial Average is trading lower by nearly 300.00 points to 11,150.00. The selling pressure seems to be continuing as almost every sector besides gold and silver are trading sharply lower.
It is important to note that the stock market rarely declines straight down in a 90 degree free fall angle on the charts. Usually, markets that decline this much will usually stage a short term bounce soon. Please understand that these markets could ultimately decline much further, however, in the near term they are very oversold at this time. Many leading stocks are now trading down into important support areas. Therefore, patterns such as the current chart of the SPDR Dow Jones Industrial Average (NYSE:DIA) are likely to be a day or two away from a short term bounce. It is important for traders to remember that nothing goes down in a straight line for too long.