DOW 30: Weekly technical outlook and review...

FX:US30   Dow Jones Industrial Average Index
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Weekly view: As can be seen from the chart, support at 15978 continues to provide a ‘floor’ to this market, but really, how long will this last? The reason we say this is because a huge amount of bids were likely removed from this level by that humongous bullish pin three weeks ago. On top of that, a bearish pin also printed last week into the close 16419.Therefore, do note this level down in your watchlists this week since if price retests this barrier, we may see this level engulfed.

Weekly levels to watch this week fall in at: 15978.

Daily view: Following Thursday’s (near) to-the-pip reaction from the underside of a swap supply area at 16895-17005. Price continued to extend lower going into Friday’s trade. This forced the DOW to close the week out just below a swap support level coming in at 16465. In the event that 16465 holds as resistance this week, it is likely we’ll see a push down to 16083 (located just above the aforementioned weekly support), since we see little active demand to the left of current price on this timeframe.

Daily levels to watch this week fall in at: 16465/16083.

4hr view: As we already know from the above, the DOW continued to plunge going into Friday’s trade. Demand at 16570-16635 and a minor swap support level at 16519 were both consumed during this onslaught. The week ended with price colliding with a demand zone coming in at 16307-16409, which, as you can see, held relatively firm.

In respect to the above, the overall structure of this market can be summed up as follows:

• Weekly action shows little buying interest from support at 15978, which could eventually see the DOW decline in value.
• Price on the daily chart shows support at 16465 was taken out, which has likely cleared the path south for further downside towards the 16083 region.
• Active bids seem to be so far holding this market higher from 4hr demand at 16307-16409, but with the above points in mind, the most we see this market rallying to from here is 16519.

To that end, we’re not going to be looking to buy from the current 4hr demand today. Rather, we’re going to be looking for this area to be consumed and look to trade any retest (with confirmation) seen at this barrier as supply. Granted, one could say, ‘well, what about demand lurking just below current demand at 16216-16298 (pink circle)?’ This point is certainly valid, and they could very well be correct, demand could still be active here. Nonetheless, with the weekly and daily charts showing little bullish emphasis at the moment (see above), we’d say this demand will likely get taken out.

Should our analysis work out to be correct, and we manage to spot a sell on opportunity on the retest of 16307-16409, we’ll ultimately be eyeing the support level seen at 16072 as our take-profit level (only a few points below the aforementioned daily support level ).

Levels to watch/ live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: Watch for bids at 16307-16409 to be consumed and then look to enter on any retest seen at this area (confirmation required).

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