DOW closed down -196.10 pts or -0.8% overnight to 24461.70. Trade war fears extended the losing streak to eight days, longest in more than a year.
Technically, the break of near term trend line support this week, and the failure to regain 55 day EMA argues that rise from 23344.52 has completed earlier that expected at 25402.83. It couldn’t reach 25800.35/26616.71 resistance zone. Immediate focus will be on 24247.84 today and next week. Break there could accelerate the selloff to 23344.52 support.
Overall, there there are a few interpretations of the price actions from 26616.71 high, they all point to the case that it’s a correction that’s not completed. That is, fall from 25402.83 could be a falling leg of the whole medium term correction pattern that could break through 23344.52 low. We’d maintain our view that the correction from 26616.71 should at least extend to 38.2% retracement of 15450.56 to 26616.71 at 22351.24 before completion.
