Talking Points
-Dow Jones Industrial Average gets close to 20,000, but cannot quite reach to new milestone
-Higher probability patterns suggest continued strength, though a dip to 19,750-19,840 is not out of the question
-Pattern remains bullish while prices are above 18,600
As we uncover the last few days of 2016, Santa Claus not only came to town, but also seems to be extending his stay. Dow Jones Industrial Average (DJIA) continues to flirt with the 20,000 mark reaching a high yesterday of 19,980. Trading volumes are light so it is possible volatile moves may not follow through for the next couple of days.
Based on the consolidation that began December 14, it does appear as though DJIA may dip slightly to finish the consolidation pattern. A dip appears poised to move towards 19,750-19,840. At this point, we do not think it will extend much, but could work its way back down towards 19,000-19,250.
The medium term pattern does appear incomplete to the upside. Therefore, we anticipate the dips would be supported near one of the previously cited levels.
If price moves below 19,000 it may become an early warning signal that another pattern is at play and we will have to reassess the wave relationships. Below 18,600 we will abandon the pattern altogether.
If prices are supported and move higher, the next level of wave relationships show up near 21,378. It would take a successful breakout above 20,000 for us to consider focusing on the higher level.
This Friday December 30, Jeremy will review the longer-term patterns for DJIA. If you wish to join Jeremy in this or his other US Opening Bell webinars to discuss this market, register and join here.
Dow Jones Industrial Intraday Chart
Created using TradingView
Suggested Reading:
2 Elliott Wave Pattern Possibilities on EUR/USD
USD/CAD Pattern Appears Incomplete Towards US Dollar Strength
---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
Follow me on Twitter at @JWagnerFXTrader .
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