Now comes critical test time- breakout or fakeout? Failure to break channel upper will lead to a precipitous decline- panic selling.
shows of the prior breakout attempts from the flag channel, in April/May and June, turned back at 2/1 and 3/1 resistance zones.
Now index has charted a powerful wave through the 4/1 zone and found strong support at nearly exactly Fibo 0.382 and leaped back into action- 8/1 final test this week, sure hope we get good grades!
Will it break out to upside or be pushed back into channel? analysis strongly suggests we have a (3) of (5) wave forming now which might have the power to carry index to ~26492 (see estimate derivation in prior post).
Technically, this is a formation and a likely outcome could be to break down from resistance at upper channel trendline:
However it may still resolve to upside and the impulse may be strong enough to breakout, if it does, as this is the third breakout, I'll buy into it!
I have examined the chart within channel and do not find a relationship in the past six weeks' trading pattern; the cup-and-handle pattern is evident, however.
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
You are raising the bar on technical evaluation of current condition,
with the next destination, and path of least resistance compellingly presented.
You are making me think twice,... something few have caused me to do in the past.
Have you ever considered purchasing Leveraged ETF's on the Dow instead of Options when trading market direction ?
I use SDOW Pro Shares 3 X Short Dow ETF, and UDOW Pro Shares 3 X Long Dow ETF,
when I wish to speculate on the direction of the Dow.
They are leveraged at 3 X the Index ( DJI ), and you do not suffer the overwhelming risk risk of Time Premium Decay,
simply an expense ratio from Pro Shares.
And you can buy.sell easily with tight Bid/Ask during NYSE hours with above average liquidity.
Finally, my friend, just some words of advise if I may from one trader to another.
Never risk more than your sleep, or comfort level can handle. Watching futures overnight is fine, I do the same,
But living or dying by what the market is doing, when you can't get out overnight, is a recipe for a heart attack or an early demise.
You are an exceptional gifted, You should make it easier on yourself by getting out of options, and into Leveraged ETF's, if you can.