I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d
So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.
This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.
Use the EMA 90 and you will see a different picture. Of even more significance is the fact that the EMA 8 is about to cross the EMA 21 on the weekly charts and the fact that the INDU (weekly) is riding on the EMA 90 and has been bouncing off it for over a year now.
I'm sure Cashin doesn't get the whole story or doesn't have the time or inclination to tell the whole story.
You however have all the time in the world.