Dow Jones Close to End Uptrend on Iran, Iraq, and US Tensions
Today, the Dow Jones is under pressure, and the future was down by about 0.63% on the day at the time of writing. The Dow Jones was lower as US and Iran strains have increased over the weekend. Also, the Iraq parliament has voted to oust US troops from Iraq following the US slaying of Qassem Soleimani, the leader of Iran Quds Force. The Quds Force is comparable to the USA’s CIA.
As the European trading session started at 8 am London time, the Dow Jones future declined to the December 31 low, and a break to the low might send the index lower. However, I would like to see a break to the December 18 low at 28229 as a better indication if the short-term trend has turned lower or not. If the index manages to remain above the 28229 level, the Dow Jones might revisit its all-time high of 28906.
The Dow Jones is also vulnerable following the 12.33% rise from the October low of 25737. Investors and traders spent most of the last few months buying shares, and they could be keen on booking profits. This view is supported by drawing an “Andrew’s Pitchfork” Channel using the April 2019 high, and May 2019 lows as critical levels, this channel suggested price would turn higher in October and given the price is near the upper end of the channel, the pitchfork is now indicating the Dow Jones index could trade lower in the weeks ahead.