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Dow continues sideways movement

Price at time of writing – 16,247.

The Dow Jones has gained 79 points since last week’s update, with the index spending much of the week oscillating around my key level of 16,175.

In the absence of any fresh triggers, the short recommendation remains intact.

Again, the index did not retest its crucial short-term support at 15,551 over the past week. Only a break below this level would trigger a new phase to the weakness seen in January. I am also conscious that the longer the Dow tracks sideways around 16,175, the less likely it is to fall substantially in any case. Typically, sideways oscillation around key resistance is an early signal that the next major move will be up.

The trigger to abandon short positions is therefore crucial, and I still deem this to be a break above 16,558. If such a scenario arose, my minimum target would then be raised to 17,778.

Recommendation: stay short. Target 14,515. Stop-losses can remain unchanged and triggered on a break above 16,558.

Dow Jones chart

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