Dow: Signs of failure at key resistance
With Mario Draghi talking this afternoon and non-farm payrolls due to hit the market tomorrow, it’s only prudent to have a covering short position in play. The Dow has been battling it out at key resistance all week and yesterday’s price action suggests that the bears have the edge.
Prices broke to fresh highs during the European session and then beat a hasty retreat into the US close. This clear rejection of higher prices formed a bearish "pin-bar" candle. If prices can break below the pin-bar lows during today’s session, we expect further downside.
Entry: Enter on a break of yesterday’s pin-bar low at 17,048.
Stop: Place your stop above the pin-bar highs at 17,198.
Limit: Place your limit around the 50% Fibonacci retracement level of the recent leg higher at 16,800.
-- Edited by Kevin McIndoe