Dow Jones making a high, bearish wedge, Part 2

I almost can't believe it, US indices are dropping. There was a bad close on Friday, closing at the lows which usually means follow through the next day, something we are seeing now with the futures being down quite a lot.

They still did a very nasty move on Friday though (blue circle on the left), pushing price up, even above 29200ish. In hindsight, it was probably a final shake out of bears before the bigger drop starts.
Now with this bearish price action, it means the bearish wedge is still in full play. 28800 was also a possible support level, but the future already broke it. So think if the future continues to stay below that level, up until the Dow opens tomorrow, big chance we continue to drop towards the target of the wedge, which is around 28400.

As mentioned in the previous analysis, if that happens, the follow could be in play:



Of course, this would be the ultimate game plan, seeing an H&S taking form. But this will only work if we see some violent selling coming days or week.

So if we see a fast drop towards the 28200ish, it will become a realistic scenario, otherwise, try to ignore it until it takes form




There are a lot of earnings reports this week, but can't say how much influence those will have. There have been many moments in the past as well, that markets simply don't react as they should during earnings season. Meaning, that price drops when lets say Apple shows better than expected earnings and vice versa. I think markets are beyong logic, for quite some time now. Think low intrest and because of it, loads of capital being in the world, playing the biggest role.

So lets see how tomorrow goes. Past half year, we have seen many V shapes after any significant drop. So think that when we don't see a V shape, it could continue to go down.


Previous analysis: