DOW’s sharp fall in early trading pushed through 55 day EMA, as well as medium term channel support. The development firstly confirms rejection by 35091.56 high. Secondly, it suggests that corrective pattern from 35091 has started the third leg. Deeper decline would now be seen back to 33271.93 support. Reaction from there would be crucial in determining the medium term outlook.
Sustained break of 33271.93 would complete a double top reversal pattern. DOW would then be corrective the up trend from 26143.77 at least. Deeper fall would then be seen to 38.2% retracement of 26143.77 to 35091.56 at 31673.50. We’ll see how DOW respond to 33271.93 support next.
