Last week I posted an analysis showing why the short-term bullish trend was supported and what support level was needed to be broken in order for the short-term pull back from the all time highs to unfold into a bigger and deeper correction. DOW JONES has held above the crucial middle Keltner support level and closed once again above it. The previous low at 16805 was not breached and early futures trading shows signs of strength today and that we open above 17k.
Trading2day subscribers were also informed through our exclusive twitter account for members that the decline pattern was very similar to a previous one shown in the chart below and that I prefered long positions as long as the low at 16805 was held and the upward bounce unfolded as the previous one. Short-term trend changes to bullish once again as price is ready to open above the Ichimoku cloud today. The downward move from 17074 has a corrective pattern and I believe there are increased chances of making another new all time high.
S&P is also making a higher open as shown by futures prices and I expect the index to break above the strong resistance of 1976 right at the open. The downward decline from 1985 has also a corrective form strengthening my view that we should expect this index also to make a new all time high towards 2000.
With price still inside the upward sloping channel, my elliottwave count shows that more upside should be expected as long as the index closes above 1950. Short-term support is found at 1965 and I would not be surprised to see a pull back to that level to back test Friday’s close. If the index closes below 1965 we should expect a move towards 1950-45, although I believe this is the least expected scenario.
NASDAQ seems to be the stronger from all three indices. Bounced off critical Ichimoku cloud support and with a clear 3 wave downward move, we strongly believe that a new higher high towards 3930 is very possible as trend remains bullish and as the index continues to make higher highs and higher lows.
With resistance at 3920-25 I expect NASDAQ to break above it today and why not see a bove 4000. Trend is bullish as long as the index is above 3837. Support is found at 3880 and 3860. I do not see this index pulling back as I believe it is in a strong upward move right now.
Thank you for taking the time to catch up on my thinking.