In order to analyze the ongoing downward correction at Wall Street, you need to focus on two big numbers: 1,900 and 1,700, these are the resistance levels the traders are fearing
Sooner or later, the day when Wall Street will fall into a “panic-selling” sentiment will come again, that’s something statistically true.
However, not every correction is a trend reversal, and this why it is very important to understand whether a downward movement in stocks represents a simple technical correction or the beginning of something bigger.
So how do you do that ?
Here you are:
We may have three different scenarios:
1) If the index doesn’t go below 1,900 then you are seeing a very small downward correction
2) If the index goes below 1,900 but stops at 1,700 then you are seeing something pretty big, but that’s still a correction
3) If the index goes below 1,700, well, you don’t want to hold stocks in that case