Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

The Curious Case Of The Dow Jones Industrials Chart

Courtesy of ZeroHedge View original post here.

Authored by Sven Henrich via NorthmanTrader.com,

The $DJIA chart is telling an interesting story, technically speaking that is. Frankly not sure what the message is quite yet, but I find it fascinating hence it might be of interest to share.

First of all, note a behavioral set of facts I’ve pointed out on twitter: On Monday $DJIA again tagged its January 2018 highs and has again rejected. All rallies to new highs have been selling opportunities. All rate cuts have been selling opportunities. Lower high in September, risk of a double top:

We see several relevant trend lines on the chart above and I could discuss these here, but I want to highlight something completely different and that is: Why is $DJIA rejecting these price zones above 26500?

Well, as it turns out, there is a technically relevant resistance point precisely at the October 2018 highs, the 2.618 fib from the 2009 lows and 2007 highs:

26948 on the futures contract. In fact, what’s notable here is that $DJIA has tried 5 times to get above that zone on a monthly basis and has failed every single time to close above it by month end. Even the current October highs have tagged there and now rejected again.

Here’s a close-up for clarity purposes:

Now if you’re bullish you can make the case that on the next tag $DJIA perhaps can break through and leave the line in the dust and proceed to break out.

But there’s another consideration here and that is $DJIA has formed a wedge pattern and that is again at risk of breaking to the downside:

Judging from the chart this pattern will come to a conclusion either way either this month or next, so we’ll have our answer by then.

If it were to break to the downside what’s the ultimate downside risk?

This chart here suggests an eventual price target zone below 20,000, i.e. the .382 fib which could be massive support and set up for a big rally.

But note no support has been broken and the 2009 trend is still intact as well. As I stated this weekend: Decision time is approaching and a trade deal may be critical for a breakout to be sustainable.

*  *  *

For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.


 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!