The DOW JONES for 7/10/2019?

#Brent #DAX It proved one of these “you don’t get out much?” weekends. An issue from living in the Scottish Highlands is lack of variety when it comes to shops. A visit to the mainland gave an excuse for a side trip into a Lidl store. They don’t appear to be listed on the markets or we’d be enthusiastically covering them today.

Never having visited this chain before, it proved a fascinating jaunt, one which ended with a set of axle stands, an electric sander, work dungarees, and of course, a packet of wire cutters. Also purchased was the item which gave an excuse for a visit, cheap peanut butter for the dog (an easy way to sneak medication to animals). Getting ready to give our little red tractor its annual service, this exquisite Aladdin’s cave of useful junk provided an excellent starter with the prices of the non food haul quite extraordinary. Hopefully the axle stands don’t collapse while I’m lying under the tractor arguing with its clutch!

Something else, also important, happened in the last few days.

The chart below has a little circle though the DOW JONES uptrend for 2019. We’ve also shown the movement as an inset as we fear it’s liable to prove important. This sort of thing we refer to as a warning sign, a clear signal an important trend can be broken. Often, when this sort of thing occurs, any movement below the trend is usually sharp, fast, and painful.

At present, the implication is we should use 26,078 as final straw.

Essentially, weakness on the DOW below this level is liable to provoke sharp reversal down to an initial 24,867 points. If broken, secondary is a longer term 23,536 points. Generally, these circled trend breaks imply reversal should occur due to some sort of negative news and worse, if our initial target is achieved, ultimately there’s a heck of an argument favouring “bottom” at 22,206 points eventually. In terms of the important question, “If I go short, where’s the stop?”, the answer is pretty straightforward; as tight as possible. The drop, if it happens, will tend not form part of a trading cycle.

What’s surprising about this scenario is the suggestion the market could be poised to reverse all movement during 2019 and ponder if Mr Trump is planning to Tweet something outrageous in the weeks ahead. Who knows, maybe he shall announce his undying love for the UK’s Mr Johnstone, just before executing a ban on all trade with the UK…

All kidding aside, there is ‘something’ about the DOW’s movement in recent month which, if it were a share price, would leave us uncomfortable.

To get out of trouble, the DOW need only exceed 26,630 to give the first hint we’re being panic merchants. As it closed last week at 26,573, it’s not a big ask.

Above 26,630 is supposed to trigger movement up to an initial 27,076 points. If exceeded, our secondary is at an amazing looking 28,285 points and the territory of new all time highs. The first major challenge, of course, shall be the question as to whether sufficient strength exists to achieve the 27,076 level. If it does, the circled break below Red shall be consigned to history as a false alarm.

FUTURES

Time Issued

Market

Price At Issue

Short Entry

Fast Exit

Slow Exit

Stop

Long Entry

Fast Exit

Slow Exit

Stop

Prior

5:24:08PM

BRENT

58.43

57.58

57.11

56.53

58.44

58.85

59.065

59.56

57.97

‘cess

5:25:49PM

GOLD

1505.05

               

5:28:00PM

FTSE

7172.97

               

‘cess

8:39:16PM

FRANCE

5503.7

               

‘cess

8:41:28PM

GERMANY

12065.26

11914

11880

11816

12002

12070

12094

12186

12001

‘cess

8:43:12PM

US500

2952.42

               

Success

8:46:19PM

DOW

26568

               

Success

8:52:59PM

NASDAQ

7756.62

               

Success

8:55:09PM

JAPAN

21533

               

‘cess

4/10/2019 FTSE Closed at 7155 points. Change of 1.1%. Total value traded through LSE was: £ 5,141,232,015 a change of -4.88%

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