The Dow Jones Industrial Average withdrew from the highs and is currently more than 800 figures down. Is this just another “buy-the-dip” opportunity or something totally different?
“Another new high should be expected, probably around 17,300, but then the bears should take control of the situation.” This is an excerpt from an article about the Dow Jones Industrial Average, which we published on August 21st. If you have been following what was going on with the Dow, you should now that it topped at 17,362. After that came the reversal, which brought prices down to 16,548 where they closed Friday. The fact that we have a decline of more than 800 points already is not the most important thing here. The most important thing is that Friday, prices broke the lower trend line of the ending diagonal we have been warning you about for so long.
This means that we now have a confirmed reversal in the Dow Jones Industrials. We recently showed you two examples of what happens after a broken ending diagonal in USD/JPY and GBP/CHF. Of course, those two patterns were of much smaller degree than the one we have in Dow Jones. That is why the consequences which may follow could be devastating, if you are still bullish. The minimum downside target is 15 340, while the second one lies at 14 710.
Furthermore, if we take our big picture outlook into consideration, we should expect the two targets to be just the beginning…