Bottom line:  Dow Jones bearish structure remains intact until prices stay below 28866 highs print on January 02, 2020.

Technical Analysis:

Dow Jones remains in control of bears as it carves a lower high at 28708 early this week. It seems that a major top has been formed at 28866 last week and Dow Jones should be headed lower until the above holds. Looking at the short term wave counts, the drop between 28866 and 28418 can be seen as an impulse wave at a lower degree. An initial support at 28376 remained just a few points away to be taken out, before pulling back. Furthermore, the subsequent rally towards 28708 was seen in 3 waves, which is corrective. A high probable trade direction from here is expected to be on the south side against 28866, with potential targets towards 27300 levels respectively. Also note that a probable Head and Shoulder reversal is into making with Head at 28866, Neck line at 28400 and a potential Right Shoulder carved at 28708 respectively. If the above short term structure holds, Dow Jones should be well underway towards lower levels. Looking into the larger wave structure since December 2018 lows at 21712, the Dow Jones has completed an A-B-C (5-3-5) rally at multiple degrees around 28800/28790 levels as highlighted on the charts. This could be yet another proof for a potential bearish reversal in the making, against 28866 highs. The entire rally from December 2018 lows until 28866 could be a part of a larger degree expanded flat structure and hence potential remains for a drop until 21712 levels, the December 26, 2018 lows, going forward. An initial soft target could be seen towards 27325 levels, which could be the first bearish wave towards the above projected targets.

Prepared by

Harsh Japee, Technical Analyst.

Dow Jones Chart

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