Dow Jones Rally Not Enough to Reverse Downtrend
Tim Knight | Aug 30, 2023 02:55AM ET
Below are two charts. The first one is the Dow Jones Industrial Average which, like all other stock indexes, had a huge rally today.
Take careful note of what’s happening, however. It is pushing its way back to the base of the rounded top. My view is that this top, formed through most of August, has defined a new direction in the market, and the Dow will soon resume its slippage lower.
The second chart is pretty much the upside-down version of the first, since it represents volatility (AKA fear) which tends to move with almost perfect inverse correlation. The VIX did a beautiful job closing its price gap today, and my opinion (or at least hope!) is that it can resume its rally at this point.
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