Dow has most probably completed a five wave downward impulsive move from it’s all time highs and is now breaking out of the downward sloping trend channel. Prices are now expected to bounce upwards towards at least the 38% Fibonacci retracement and eventually end the upward correction between 50% and 61,8%.
In the following charts you can see prices in the one hour chart breaking out of the downward sloping channel and above the Ichimoky cloud. Chances are high that the index is heading towards the first resistance at the 38% Fibonacci retracement.
On the daily chart below you can see that the bigger picture is in favor of bears because of the break down of the cloud support. However the downward impulsive move seems complete and it is time for an upward corrective wave to unfold. If the resistance area is broken we should expect prices to reach our target near the 61,8% retracement.
Breaking below 14750 will mean that the decline is not over, but I give little chances to that scenario. I expect prices to rise until early next week and from Tuesday prices to meet selling pressures strong enough to give a new low near 14600. For more help trading this index don’t hesitate to contact us. Become a subscriber today.
As always, thank you for taking the time catch up on my thinking.