A resurgent Covid-19, the upcoming election, and the lack of stimulus have all conspired to put the Dow Jones Industrial Average on pace for its worst weekly drop since March. The question now: How much lower can the stock market go?
When in doubt, we turn to the charts, which can be useful for spotting the next support level. The Dow Jones Industrial Average, for instance, is down 729.74 points, or 2.7%, to 26,733.45. That puts it just under support at its Sept. 23 low of 26,763. If the benchmark is able to close above that level today, great. If not, the next support might not come until 25,000, down 6.5% from the current level.
The S&P 500, down 2.9% at 3292.31, has crashed through support at around 3350, and will be looking to find some near 3200. That’s 2.8% lower than current levels.
It’s a mighty important one though, technicians say. “The S&P absolutely must in no uncertain terms hold ‘3,200’ to avoid generating a Double Top sell signal which would force me to rethink everything,” writes Evercore ISI’s Rich Ross.
That goes for all of us.
Write to Ben Levisohn at Ben.Levisohn@barrons.com