Bottom line:  Dow Jones bearish probabilities remain high but a marginal high above 28175 levels could be print, before it reverses sharply lower.

Technical Analysis:

Dow Jones bears seem to be in control after dropping to 27350 levels last week but it could be seen as a lower degree wave iv (not labelled here) drop and the indice may print another marginal high above 28175 to terminate Wave C before reversing sharply. Considering the short term wave counts since 25743 lows on October 03, 2019, Wave C might have terminated at 28175 levels or might still be in progress and terminate its lower degree wave v marginally higher. Please mark resistance zone between 28200 and 28350 levels for the anticipated bearish reversal. Also note that strong bearish divergences could be seen on the RSI while prices attempt another high (not shown here). A high probability trade direction still remains on the south side, against 28700 levels, leaving room for just another noise above 28175, with potential targets at 27350 and 25740 going forward. The overall wave structure since 22219 lows print on December 24, 2018 is unfolding as an A-B-C at a higher degree with Wave A terminating at 26696, Wave B unfolding as a triangle consolidation and terminating at 26000 and Wave C potentially terminated at 28175 or could terminate at 28250 levels respectively. A sharp reversal remains high probability from above described levels that could drag prices lower below the December 2018 lows at 22200. Please avoid getting into any bull traps especially around fresh highs at 28177/200 levels. A conservative and safe trading approach could be to remain flat until prices break below 27350 levels, the potential wave iv termination discussed above. Watch out for a flash print around 28175 and above, followed by a sharp bearish reversal going forward.

Prepared by

Harsh Japee, Technical Analyst

Dow Jones Chart

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