Dow Jones making a high, bearish wedge
Updated
Dow was making a bearish wedge last week, but glad i did not post it though. Indices and especially US indices have been a nightmare for bears past half year. Almost each bearish sign has become a trap. When seeing the wedge break upwards i was happy for NOT posting it :).
But now, we see the breakout is failing. Price is starting to drop back in to the wedge again. This is usually a big sign, but as mentioned, indices have been a nightmare for bears so one has to be VERY careful. Important now is that we continue to drop and break that first green support around 29000 (chart on the left is mini future btw, but prices i mean is for the normal Dow index). If we move sideways too long above 29000, we prob go up again.
Now if we break 29000, want to see it dump to 28800, here the same thing. We can hang there a bit, make like a bear flag, but if we go sideways too much, then also big chance it will continue back up. Now target for this wedge is the second green zone, around 28200/400.
If we reach this level, it could mean more bearish pressure for the coming month, could mean correction is done already and bull trend continues. Need to see this play out first before making a call on that
But now, we see the breakout is failing. Price is starting to drop back in to the wedge again. This is usually a big sign, but as mentioned, indices have been a nightmare for bears so one has to be VERY careful. Important now is that we continue to drop and break that first green support around 29000 (chart on the left is mini future btw, but prices i mean is for the normal Dow index). If we move sideways too long above 29000, we prob go up again.
Now if we break 29000, want to see it dump to 28800, here the same thing. We can hang there a bit, make like a bear flag, but if we go sideways too much, then also big chance it will continue back up. Now target for this wedge is the second green zone, around 28200/400.
If we reach this level, it could mean more bearish pressure for the coming month, could mean correction is done already and bull trend continues. Need to see this play out first before making a call on that
Note
Of course, this would be the ultimate game plan, seeing an H&S taking form. But this will only work if we see some violent selling coming days or week. So if we see a fast drop towards the 28200ish, it will become a realistic scenario, otherwise, try to ignore it until it takes form
Note
What i updated in my public channel an hour ago (i still have not figured out how to post an update on TV with my mobile):This here is what’s called an island reversal. Having a gap on the left, some top formation in the middel and then a gap on the right as well, exactly what we saw today. But now the gap is being closed again, taking away the weight of the pattern. It’s exactly this what we have been seeing past half year. Each time it shows some weakness, at a certain point buyers come in (support), then starts to take too long and up it goes again. Exactly this is why I mentioned it has to happen fast, otherwise bears will most likely fail once again. Now 29200 is still a resistance, the important last hour had just started, but I don’t have much confidence at this point to see a big drop.
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