The Dow had a powerful bull run to a high of 29,380 early January that it just beat a trading day ago! So Fridays dip on face value is a reaction to hitting resistance.

Furthermore the January correction was orderly, bouncing off of the previous high of 28,200. So in technical terms the current trend implies that the Dow is pausing before making another run for 30k. Even the MACD has unwound most of its overbought state of the past 3 months. The only negative is that the Dow breached the uptrend line during January's correction, but even there it has managed to recover to back above the original trendline despite Fridays drop.

Also there is a 30% probability that the Dow made a double top pattern which would target a drop to 27k. Though again it is a relatively low probability at this point in time.

The rest of this analysis that concludes in a detailed trend forecast for the Dow stocks index has first been made available to Patrons who support my work (Will CoronaVirus Pandemic Trigger a Stocks Bear Market 2020?).

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Nadeem Walayat

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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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