I thought I'd start small time frame and work out on the Dow. Friday night saw a continuous push to the downside, with price dropping below the 1-5 day FLDs and holding the Weekly Trendlines in a strong downward formation into S4. However, the blue channel consists of what looks like a waves 1-5 already, so any further drop in price is surely looking for a correction at least and the daily FLD sits at 15630 currently, as a starter for ten.
Price managed to wipe out all of the FOMC spike and will have caught stops galore, possibly explaining the grind down Friday. Price is at the gap from last weekend but into a monthly MyWave which is only recently back uphill. With the MACD looking very 'c' wavy and the hourly momentum study oversold, I am looking for price to bounce first thing not collapse. I have drawn in the obvious expanding diagonal for now.
The 4hr Ichimoku is looking bullish here although cloud backtesting looks on with plenty of room in the momentum study for further bearish action. However, wave 2 was a very deep affair at the beginning of this wave up, and perhaps we will see a triangle/diagonal here, rather than anything else. Certainly the MACD is looking '4' ish at the moment.
The daily Ichimoku cloud is getting backtested but has held thus far and although the daily momentum study is toppy, the 2-5 days are not and the MACD is only just got going uphill. I think a rest and consolidation is more likely than a dive but time will tell. I had shorted the possible diagonal top last week, but banked into the cloud base and hoped for a bounce.
Another bullish storyboard with the weekly momentum study paying out its overbought status by moving uphill in higher lows. I can see no reason to ignore the UTL spanning the page at 16100 at the moment, and when this consolidation is over, being the likely target.
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