Is the trend reversing?
The Dow Jones Industrial Average is making higher highs after oscillating in the resistance area of the September highs (11,400-11,700).
The 4 hour chart covers the whole decline started in early April and the current rally reached yesterday the 61.8% retracement area. Therefore, the 11,950 level is set to be a strong resistance adding the fact that this area represents the mid June lows (end of wave [i]).
Having this levels in mind, we can think of two scenarios, both pointing to the down-side: if sellers will overcome buyers in this area, the break of the 11,700 support will set the market for further decline; if sentiment will remain positive in the next days, we can see bull move looking to test the 12,000-12,300 area.
Keep in mind that the Elliott Wave theory states that a wave 2 (which seems to develop in our case; formed of [a],[b],[c] sub waves) will make the investors think that the trend has reversed and most of the time reaches the 66% retracement area.
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