Dow Weak Weekly Close (W)

As outlined in today’s email update, the weak ending to the week leads me to believe there may be some follow through to the downside next week. I still expect a move back up to 18250 before any serious correction takes place but this may not be until late August if more downside is indeed seen now.
Let’s quickly look at the weekly chart to put a picture to go with my thoughts.


The US market was closed on Friday due to the July 4th holiday. The market is often bullish going into holiday weekends so this was the first thing that raised my eyebrows. 
The PSAR indicator is bearish with the dots above price.
The Bollinger Bands show price is back at the lower band. Price bounced somewhat off this support but looking at the weekly candle it doesn’t look very solid. I think price can now head a bit lower as it clings to the lower band.
I was looking for the weekly candle to be much less bearish and even positive. This didn’t happen and when things don’t play out as expected I go back to the chart to reanalyse the situation.
Upon reanalysing the technicals, the first thing that stood out were the lower indicators which are all looking decidedly negative. The RSI is trending down and looking weak while both the Stochastic and MACD indicators are bearish.
Taking this all into consideration, I now believe price is headed further down before rallying back up.
I have drawn two horizontal lines denoting previous swing lows at 17579 and 17037.I now expect the next low to be well below the upper horizontal line and perhaps even below the lower horizontal line.
I have drawn a Fibonacci Fan from the lower swing low to all time high and one possibility si price finds support at the 88.6% level.
I still expect a rally back up to at least 18250 and this may well set up a head and shoulders top with the March 2015 high at 18288 the first shoulder and the all time high at 18351 the head. 
As for some timing, there is often a period of accumulation and distribution after a major high lasting around 3 months. The all time high occurred on the 19th May 2015 so a potential timing target for secondary high would be mid to late August 2015.
So perhaps this means the Greeks will vote no in the referendum on the Euro terms??


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