Dow Jones/S&P 500 ratio is at the lowest level since the dot.com bubble but still above %10 above of that bottom. Dow Jones Index is closer to the main street than S&P 500 and Nasdaq and this shows that the real economy still too weak.
In our early post of 2 weeks ago, in our Dow Jones article we talked about the percentage of members that above the 200-day MA indicator. Whenever this indicator turned near %97 levels, Dow faced a small or medium correction a couple of weeks later. After Biden took Oval Office from Trump, indices jumped but since then Dow started to stabilize and stayed in the channel, unlike others.
Analysts’ expectations still show near %10 upside potential in 12-month time but Dow may face a correction around 1500 or more points.
The price is moving in a bullish channel, just above 1.5 standard deviation of 200-day MA. As long as Dow stays in this channel and above 50-day MA we can’t talk about a correction. But below 50-day MA, 100, and 200-day moving averages can be possible targets for the downward move.
For upside moves, the upper land of the channel (currently at 31375) may continue to become the limiting factor for the price.