Tuesday, December 3, 2019

Dow - Down with a gap

Dow (27,502)

When President Donald Trump signed into law the congressional legislation 'The Hong Kong Human Rights and Democracy Act 2019' last Wednesday, Dow still managed to hold above the upper trend-line on Friday after the Thanksgiving holiday on Thursday. Dow formed a long red candlestick on Monday followed with a gap down on Tuesday.


In addition to that, the index has moved below its upper trend-line.


Since it failed to pulled away and maintained above its upper trend-line, I have no choice but to bring one of my previous scenario of wave D and E. This is very bearish.

Besides this scenario, there is another less bearish scenario that I mentioned 3 weeks ago in my article dated 16 November.


There is this possibility that Dow is forming an overlapping i-ii-iii-iv-v wave (i). Wave (ii) is expected to be a 10% or less correction to around 25,700 to 25,300 level.

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