Weekly Update-Dow Jones Industrial Average- Aug 27- Sep 2, 2017

Scott Zwack
Aug 27, 2017 · 3 min read

Dow Jones Industrial Average

Weekly

With new lows being made early in the week at 21600, we seen the market quickly retrace these losses by producing the high at 21912 on Tuesday August 22nd. It is important to note that the close of 21813 is within the upper 1/3rd of the range which has us continuing to lean on the bullish side of the market.

The primary timing convergence we noted in the previous weekly report was coming in during the week of August 21st. With time and price merging during this past week, we look at the lows of 21600 to be the critical area as we move forward and look for higher prices. Only a close below the lows from this past week would have us looking for additional bearish price action beyond the key timing convergence during the week of Aug 21st. While this scenario is not favored, should this occur we would be looking at the critical support zone of 21279 (July lows) to hold our long term bullish thesis.

With the market closing back into the uptrend channel of support last week, we mentioned that we needed to see an additional close below the lows from last week at 21641 to confirm the event. We can see on the technical chart that the market has regained this support zone by closing back above the technical line positioned at 21809 this past week. This should not be overlooked as it does give us the ability to test the downtrend line starting at 21961 on Monday August 28th.

We will be focusing this week primarily on a close above the highs from this past week at 21912. A close above these highs will provide the conviction that we need to signal a bottom is in place and the market is looking to trade higher into the next timing convergence during the week of September 25th. We also need to be mindful of the July close at 21891; a close above this level for the month of August keeps the market in an extremely bullish set up long-term.

Daily

The market continues to trade within the short term range currently defined at the resistance zone of 22085 and the support area of 21565. While we continue to be bulls in a bull market, we are watching the critical support area at 21565 to hold as the primary area of support. Only a close below this area would open up the possibility of testing the longer-term support discussed in the weekly analysis at 21279.

Looking at the technical chart, we can see that the uptrend line defining this current move from the previous area of consolidation during June 29th has us watching 21628 as the important technical support level this week. Penetrating and closing below this uptrend support zone would open the possibility to test the more important support zone of 21565. September 1st needs to be noted this week as the key timing convergence. Creating a low on this date, while remaining above the key price levels noted above would be an extremely bullish set up.

While we remain bullish on the overall market, we need to see a trade above the highs from the past week to add conviction to our call that the lows from last week may be in place. Remaining below this area (21912) in the coming week leaves the market vulnerable to test the support zone before ideally seeing a rally into the 22019–22085 area of resistance.

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Scott Zwack

Macro Trader. Analysis for Equities Markets, Currencies, Commodities, & Bond markets

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