Keep an Eye on Dow 24,000

  • Order Reprints
  • Print Article
Text size

It's a another big down day for the market--the Dow Jones Industrial Average has dropped 573 points at last look--but we're not feeling too worried about it yet. And there's a good reason for that.

The chart below shows the Dow Jones Industrial Average over the last month. It closed at 24,345.75 following Monday's 1,175.21 point selloff, before rallying on Tuesday. That Tuesday rally, however, included a quick drop off the open that took the Dow as low as 23,778.74. So 24,000 splits the difference between the two pretty nicely, and that's the level to watch. (Today, it's traded as low as 24,213.)

Somewhere in that area should be what the technical analysts call support--where the market could find a floor. But right now, it's stuck in a no man's land between fear and greed. Investors don't want to miss the rally, if it comes, but they don't want to be buying more shares only to see the Dow breaks lower. So they'll be watching to see what happens if or, more likely, when stocks get close to 24,000 again. If it holds, the market would have successfully "re-tested" the recent lows. If it breaks, watch out below.

But until it does one of those things, we'll just keep watching...even with the Dow off more than 600 points at one time today.