Dow Jones Is At A Crossroad

After 3 consecutive session of selling, declining from a historical high of 28,174, the Dow has reached an important level. The Dow is now sitting on a previous resistance turned support. It is also a possible location that could determine the next direction of this index, together with another important support just lower at 27,120. If this 50 points support cannot halt the decline, the trend could turn bearish, at least for the short term. The test to the cloud support will determine the longer term trend.

Just as we assume the trend would be turning bearish because of Trumps warning of a delay to the US-China trade deal, we have news,reported by Bloomberg, of a possible phase 1 one agreement close at hand.

MACD had given a bearish divergence warning but MACD is still bullish. The index is also above the Ichimoku cloud. Tonight price action on the Dow will likely determine the next near term direction. Watch the support at 27120-27,174.

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