Dow Jones Industrial Average Consolidates Near All Time Highs
-Dow Jones Industrial Average (DJIA) continues to consolidate near all-time highs
-The medium term outlook is for higher prices towards 19,700 and possibly higher levels
-Below 17,800 would force us to reconsider the higher probability technical patterns
Last week was a good week to take a holiday. Dow Jones Industrial Average did increase but only marginally finishing the week up less than 1%. In essence, the market continues to consolidate near its all-time highs. Previously, we were anticipating a technical correction to hold above 18,167. The low last week on US30, a CFD which tracks the DJIA, reached 18,242.
Bottom line is that little has changed from our previous report on July 28. We are anticipating the medium term trend to remain higher towards 19,700 and possibly higher levels. A move below 17,800 would cause us to reconsider other higher probability patterns.
Chart prepared by Jeremy Wagner
From a sentiment perspective, the number of traders holding long positions in US30 is 5% below levels seen last week while the number of traders holding short positions has grown 5%. Though this is a subtle shift, it does point towards potentially more gains in US30 which supports the medium term outlook. (Learn how to trade with SSI here.)
Interested in a longer term outlook for equities? Download our quarterly forecast here.
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---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.