Major stock indices are falling every day to new lows. Such a strong market crash wasn’t here for decades! As traders, I think we need to keep our heads clear and start looking for some nice trading opportunities. Stocks are getting cheaper and more attractive every day!
Dow Jones index
In today’s market analysis I would like to have a look at the Dow Jones index, the world’s most famous stock index.
This one correlates with all the other major indices and also falls to new lows every day. It won’t be falling forever though! The underlying asset for this index are the strongest US companies. US government won’t let those fall (not while the US central bank can print money indefinitely).
As an investor, I am looking for buying opportunities now. I want to buy those strong companies cheaply!
Volume Profile analysis
The simplest way to identify strong support/resistance is to use the Volume Profile indicator and look for heavy volumes. It is as simple as that.
What I did here was that I used my Flexible Volume Profile over the uptrend area which took place in the last 10 years. That’s an insane amount of data so I used a Monthly chart to simplify things.
The Volume Profile revealed that the heaviest volumes got traded in a rotation around 17000, which took place in 2015 and 2016.
This heavy volume area is a 10-year POC (Point Of Control)! Heaviest volumes in this whole 10 year uptrend were traded there! I cannot really imagine a more significant information than this!
Dow Jones futures index; Monthly chart below: