Positive economic data from the US provides no support to investors’ sentiments. US equities open sharply lower, following the global selloff. DOW falls more than -1% and hit as low as 25005.87 in initial trading. S&P 500 and NASDAQ are also down around -1%.
The strong break of 25120.07 support in DOW is a strong signal of near term reversal. That is, whole rise from 23997.21 has completed at 25692.72 already. Focus is back on 55 day EMA (now at 25030). Sustained break there will at least bring a test on channel support (now at 24412). Meanwhile, near term outlook will now stay cautiously bearish as long as 25339.51 minor resistance holds.
In the bigger picture, DOW is in medium term correction since 26616.71. Price actions from 23360.29 are seen as the second leg of the pattern. It’s early to confirm. But firm break of near term channel support will argue that the third leg of the consolidation pattern has started. And DOW would target be targeting 23360.29 again.
