US30/the Dow Jones Index has been slowly forming a rising wedge
for the past few weeks. The market has been hitting all time highs and quickly rejecting these highs. On December 21st we even saw a false breakout of the wedge
on the daily timeframe
with the dow dropping over 950 points in just one four hour candle, but it quickly bounced up off of the strong support around 29426. The market has been impulsively moving up and is long due for a correction as you can see with the wicks formed with the two latest daily candles. The latest news around McConnell rejecting the $2000 stimulus and cases of the new Covid19 strain being found in the U.S. should put enough fearful sentiment for people to start taking profits on their stock positions and selling like crazy. There is also a massive bearish RSI
divergence showing that a reversal is bound to happen. I expect to see the Dow drop at least 1000 points or more. If it breaks the 29426 support we can see the market bleed to 28000 or even 26000. I've been looking at breaks of uptrend market structure on the 1 hour timeframe and also spotted a small head and shoulders
pattern so I believe the selloff should start soon.