Dow Chart with Patterns June 28, 2020

Attached is a 60 min chart of the Dow (DIA) that shows the two Head & Shoulders Patterns I have been talking about in my Daily Comments for weeks. On Friday, the Dow closed right at the neckline of the larger H&S pattern. So IF the Dow starts out lower on Monday and breaks below the neckline, the odds are high that the large cap index is headed for 23,000 or below. On the other hand, IF the Dow starts out higher on Monday, it will likely rally to about the 25,750 level +/- before falling to 23,000. I would view any rally near the 25,500 – 25,750 level as a major shorting opportunity.

Students should also understand that IF the Dow begins to move lower, towards 23,000 or lower, it will only be Wave 3 down of a five wave sequence for Major Wave C down. Once all five waves of this sequence are complete, the Dow will likely be trading below 18,000, with significantly lower prices possible.

Friday’s close near 25,000 represents a critical level for the markets. If broken, it will likely send stocks reeling. Protect yourself!

h

BTW, If I had a Classroom at UNF or FSCJ, the is the time I would be holding an Update Class to warn students of the seriousness of the situation. So please treat this posting as a substitute for the Class. If you use a financial advisor, you might want to discuss the attached chart with him.