Dow Higher High (D)
Created on Thursday, 21 April 2016 00:34
Written by Austin Galt
The Dow looks to have finally put a top to this impressive rally. So we have a higher high and now wait for the next higher low. Let’s update the daily chart.
DOW DAILY CHART
We can see price traded marginally above the November 2015 high, denoted by the horizontal line, and we now need price to trade back down thereby setting up a false break high. Price is currently marginally down as I write but nothing is yet confirmed.
The Bollinger Bands show price making one final push into the upper band and price moving away from this upper band now will signal the rally is over in my opinion.
The RSI shows a nice triple bearish divergence at this high which was the expectation. I now expect a significant move down.
The MACD indicator is still yet to turn bearish although it is showing a bearish divergence.
As for target levels for the move down to end, I have added Fibonacci retracement levels of the move up and I expect a deep retracement with the 88.6% level at 15770 firmly in mind.
Once that next higher low is in place there will be nothing left for the bears to do and the bulls will take over.