DIS Sends a Strong Negative Technical Signal-In Reaction to Earnings

In our discussion about The Walt Disney Company (DIS) yesterday at 12:30 PM ET ahead of earnings, I wrote... "a negative reaction to EPS that breaks and sustains beneath 118.00 will indicate that DIS has peaked... and is entering a digestion/correction period. "

In view of the enclosed chart, that shows the plunge in DIS from 122+ through 118, and the downside acceleration to a pre-open low at 110.63 so far, I think it is fair to say that DIS has put in a significant high.

In fact, given our discussion of the dangerous monthly technical set-up in DIS ahead of the earnings report, DIS should be in route to a total retracement of the entire May-Aug upmove from 107.41 to 122.47, which will represent the initial downleg of a much larger-developing, intermediate-term correction.