The Dow Jones in the last two section has dropped more than 200 points and it seem that a new negative trend is in place. A double top in the daily chart is already forming. Whether or not would become an essential signal it remains to be seem. Traders will be watching if the double top completes its pattern and how much will influence the chart.
At the moment a support and resistance level of 13200 and 13061 respectively can be assumed. Any downward movement beyond the support level and the chart could go into a more lengthy retreat than expected. The Dow Jones has repetitively move up in a similar uptrend, and in most circumstance it doesn’t repeat for a four time.
The current up trend wave is shorter than its peers and with similar structure, the shortness could indicate a tired market, and perhaps it is overbought as it show in a weekly chart.
Supporting the move down will be the current season of companies reporting their earnings. Texas Industries, Wells Fargo & Co, will be focus this week and Citigroup Inc, Goldman Sachs Group Inc, Intel Corp, Johnson & Johnson, The Coca-Cola Co, Yahoo! Inc and more will commence reporting next week.
It will be an extremely busy week for traders trying to keep up with the releases and selecting they trade. Expectation aren’t high, keeping an eye in the index performance could give an indication of what to do. Bears might be getting ready.