Weekly Update-Dow Jones Industrial Average- Sept 3–9, 2017
DOW JONES INDUSTRIAL AVERAGE
With August now behind us, we need to take a look at the price action that resulted in relation to the previous months. Here we can see in August that we continued to make higher highs, higher lows, and ended with a higher close than that of July. We look at this to be evidence of the bull market continuing and see no reason why an imminent bear market may be upon us.
Closing the week at 21987, we can see that the market has isolated the lows on a weekly basis from the week of Aug 21st. Looking forward, we need to now see a weekly close above the 22044 resistance being projected from the high during the week of July 31st, a close above this target will be a true signal that new highs are imminent.
We remain confident that the lows seen during the week of the timing convergence mentioned on Aug 21st has provided a solid foundation for a further rally. While it is our anticipation that higher prices will be seen into the next timing convergence during the week of Sep 25th, we need to remain open to the possibility of an alternate event. We would only expect new lows to unfold should we see a weekly close below the lows from this week at 21673. Only a weekly closing below this area would then open the door to a bigger pullback into the 21200 area where we see critical support on the weekly timeframe.
The technicals remain supportive of the overall bull thesis as we can see the Upper channel support zone of 21896 for this week has been holding. We would need to see two consecutive closes within this channel to suggest that we may test the bottom of the channel support, again, down at the 21200 zone on a technical basis.
The price action seen of Friday Sep 1st was very interesting as we penetrated the overhead resistance mentioned at 22019 & 22036 but failed to close above. Normally this would have us expecting a pullback into the support zone at 21812 but with the market closing at 21987 on Friday, we have closed above the important resistance at 21984.
With the isolation of the weekly low, and a close above the important resistance at 21984, we are expecting higher highs this week, however, there is a possibility that the upcoming timing convergence on Sep 6th may in fact be an opportunity for a pullback low before resuming the rally to higher prices. For this to play out, we will be looking for a close below 21971 to suggest that we trade back into the support area at 21812 by Sep 6th. A failure to close below 21971 prior to Sep 6th will set the market up for imminent higher highs from that of last week and a second test of the critical resistance area at 22019–22085.
The technical chart continues to remind us not to fight the bullish set up as we are starting to make higher highs and higher lows on the daily chart since bottoming on Aug 21st. The market has however, traded up to an area of resistance being project in the uptrend channel(s) and the breakout line. The resistance zone for Sep 6th is standing at 22047 while the support projected within the same channel is down at 21700.
As always, thanks for reading, your eyes and time are much appreciated.