Dow futures show break out signs
There is a trend line resistance in the Dow Jones charts that I have seen so many times the last few weeks. Bulls were hoping to break above it while bears expected price to get rejected and reverse price back down to 2018 lows. We are now breaking above it.
Many fractalists also point to the similarities of the currrent chart with the crash period of 1987. Then the Dow Jones got rejected at the trend line resistance and fell back strongly to new lows. This time it seems that the bulls are stronger and are breaking higher. It is important for the bulls to hold above the trend line. A long upper tail and a red candle would be a very bearish sign as it would imply a false breakout.
I believe there are many chances the entire correction is over and we could see the market move back to its highs or even give new all time highs this summer. Weekly price remains inside the bullish candle and there is no bearish divergence in the RSI. A bearish divergence would increase the chances of a bigger decline, but at this point this is a secondary scenario with less chances of success.
I'm bullish expecting the market to produce a new high over the next few months and the RSI to make a lower high and provide a first weekly bearish divergence.