Dow Jones (DJI) is approaching crucial support levels for the entire run-up that we saw this year. This could be a make or break situation and this time all eyes are on corporate earnings. If the earnings season disappoints the market then we could see the Dow Average taking a swift dip towards 12,000 index level. Discussing key levels on the Dow and VIX for the earnings season.
For now, the key support for the bullish momentum to hold remains at 12,700. I expect the market to come down to this level and then bounce back to retest the 13,200 region. Overall, I expect the market to remain ranged till the earnings season completely plays out and a clearer trend emerges.
This is not a good time to buy for long term; rather you should be looking at short term trading positions. I would place my stops around 12,700 on the index and any upside to 13,500 should be a good region to book profits.
Keep an eye on the VIX, it has a strong resistance at 22 and any closing above that level should be considered as a signal to cut out your long positions in the market. If the VIX were to fall below 15.50, it should be taken as a positive trigger for the market and in such a scenario the Dow should be good for a move up to the psychological mark of 14,000.
Use the comments section share your views on where this market could be headed this earnings season.
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