Video summary
Larry Pesavento from TFNN provides an update on the market performance of the Dow Jones Industrial Average since August 5th, highlighting a significant shift in technical patterns. He points out that after reaching a critical level around 38,200 during the first week of August, the index experienced a strong rally over December 11th and 12th, followed by a substantial correction that took five days to stabilize. Currently, the market is testing this key support level again, and any break below it would signal a complete reversal of the recent upward trend, leaving the outlook for major stock indices decidedly bearish.
The only sector showing relative strength in this environment is the Russell 2000, which has been under close observation as a potential safe haven. On an hourly chart, the Dow's ability to hold above the 38,200 level is crucial; a drop of just 60 to 70 points could be enough to shatter this psychological barrier. Pesavento emphasizes that these levels are not mysterious but rather fundamental numbers derived from market structure, and failing to respect them indicates a loss of momentum without any immediate relief in sight.
Beyond the technical analysis, the update briefly touches on unrelated news regarding Mark Zuckerberg's legal settlement with 29 states over allegations of abusing power concerning children on social media platforms. Originally facing a lawsuit worth 1.4 trillion dollars, Zuckerberg settled for a mere 15 billion dollars paid over ten years, a stark reduction that Pesavento finds amusing and indicative of the unpredictable nature of high-profile legal outcomes.
In conclusion, the primary focus remains on the fragile state of the major indices as they approach critical support zones where even minor volatility could trigger a downward trend. The speaker warns investors not to rely solely on fundamentals or earnings reports when such clear technical breakdowns are forming, urging caution as the market tests these vital levels. With the Russell 2000 being the last line of defense against a broader sell-off, all eyes are on whether this small-cap index can sustain its performance while the larger indices continue to struggle near their breaking points.
Read the full video transcript
T F N N headline news update.
>> Okay, folks. Larry Pesavento for T F N
we're looking at the Dow Jones over the
last month since the 5th of August. You
can see we had our first ABCD Gartley
here to 382 back here in that real
critical day.
Over these December 11th and 12th when
we had that greenness here and this
we've had a big break. You notice this
break here took 5 days to correct
itself. And here we are in the 5th day
yesterday and you can see the market
starting to move down, folks. We have a
very bearish picture for forming in all
of these stock indices. The only one
that is holding up relatively well of
course is the Russell 2000. But this is
the one we've been watching very very
closely as you can see here. Pullback
here yesterday it was exactly 382 and
we're testing it again right now.
You can just see there we went right
down to it just a few seconds ago. It
already rallied 100 points. So getting
below this level right here which is
below 53 390 if we break below that then
that's telling you that that trend that
we've had here has completely reversed
and that this is the there's no holds
barred right now right where we're
standing on this particular chart here.
With this this is an hourly chart. These
382s work. You can see how it worked
here. And it's doing the same thing.
It's going back and testing it right
there.
It doesn't it doesn't take much to break
it only 60 70 points in the Dow. It'll
break it but that's how it's you see
these. We'll see it in several things
that I'm going to show you today.
It's nothing mysterious they're just
numbers. The problem is you don't have
the glory of looking at all the
fundamentals and
earnings and all the other stuff. So
that's the main thing. I believe that uh
Mark Zuckerberg should get the reward
for one of the smartest people in the
world. Uh he settled his case against
the uh 29 states that were suing him for
you know, abusing his power as uh
uh whatever the
social media thing was with with
children. He was being sued for 1.4
trillion.
He settled for 10 cents on the dollar
over a 10-year period for uh 15 billion
over a 10-year period period. Are you
kidding me? I
Anyway, you got to love this stuff,
folks. You can't make it up. Anyway, so
that's pretty much covered. We'll see
what's going on.
Anyway, we'll take a little break here
and we'll be back right after the break.