Dow Jones (US30) – Evening star formation warns of deeper correction

Evening star formation warns of deeper correction

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Dow Jones (US30) – Evening star formation warns of deeper correction

Weekly:  Posted a Bearish Outside Week (week 29th January) and the market has failed to recover to here despite new all-time highs being posted in S&P’s. This is often an indication that a top is in place. The correction since start of June is forming an ending wedge formation with this weeks rejection of the top of that formation boosted by a shooting-star type candle. The 78.6% Fibonacci retracement level held firm and the rejection could lead to further weakness with stochastics crossing at over-extended levels.

Daily: The reaction higher from the bullish hammer (15/08/18) looks to have topped out, forming an evening star formation. The sell-off stalled and reacted higher from just in front of 25600 although this reaction rally has also stalled. Overnight dip has been bought into, however, we expect further selling to continue as stochastics cross lower on this time frame. We look to target a move to the previous swing lower near 25000.

 

 

Action:

We look to Sell at 25700

Stop: 25900

Targets: 25200 and 25000

 

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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