ICmarkets

DOW: Technical outlook and review.

FX:US30   Index of top 30 shares on Wall Street
129 0 1
Weekly Timeframe: The weekly timeframe shows that DOW Jones index saw further downside last week. In the event that the sellers can continue with this intensity, we might, just might, see price retest the ignored weekly Quasimodo level at 17135 again.

Daily Timeframe: From the pits of the daily timeframe we can see that price is currently ranging between a daily demand area coming in at 17561-17655, and a daily decision-point supply area seen at 18029-17864.
A break lower here could very well force price to sell off down to a daily demand area coming in at 17032-17186 (encapsulates the aforementioned ignored weekly Quasimodo level).On the flip side, should a break higher be seen, price will likely to test immediate supply seen above at 18160-18080.

4hr Timeframe: For those who read our recent reports on the DOW, you may recall that we had a live buy order in the market from 17625, set just above 4hr demand at 17561-17617 (located deep within daily demand mentioned above at 17561-17655), which, as you can see, moved nicely into profit before aggressively selling off back down to where we initially bought. Fortunately, we closed the full position at the 4hr swap level seen at 17821.

Buying for a second time around this 4hr demand area is most certainly valid in our opinion. Nonetheless, we would not enter long here without confirmation from the lower timeframes since the first touch, the one we bought into, has likely consumed buying pressure and potentially weakened the upper limit of this zone. In the event that a close below this area is seen, however, we’ll then shift our attention to looking for shorts down to the fresh 4hr demand coming in at 17285-17350.

On the sell side of this market we see two areas of interest:

1. The 4hr supply area seen at 17902-17868. This area is fresh and is located just within the daily decision-point supply area coming in at 18029-17864. This barrier will, if price reaches this high, likely see a nice bounce. However, trading this area with a pending order may not be the best path to take, simply because there is a far better-looking supply seen just above, so lower timeframe selling confirmation is advised here.

2. The 4hr supply area seen at 18029-17971 is very attractive as it is not only fresh, but is also located VERY DEEP within the aforementioned daily decision-point supply area. Our team has deemed this area worthy of a pending sell order, which has been set at 17962 with a stop just above at 18036.

Current buy/sell orders:

• Buy orders: waiting for lower timeframe confirmation around the 4hr demand area at 17561-17617 (Predicative stop-loss orders seen at: 17553).

• Sell orders: 17902-17868 (Predicative stop-loss orders seen at: 17909) 17962 (Predicative stop-loss orders seen at: 18036).


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