-Dow Jones hit the target low of 16,780 yesterday
-The subsequent bounce higher appears corrective, look for another dip to 16,780 or lower
-Event risk on Friday morning via the US Non-Farm Payrolls report likely creates volatility tomorrow
Dow Jones Industrial Average hit a low yesterday of 16,763. We highlighted yesterday that the price behavior around 16,780 would help provide clarity to the maturity of the uptrend. Prices subsequently bounced hard higher which leaves the door open for even higher prices down the road.
However, shorter term the US30, a CFD which tracks the Dow Jones Industrial Average, sits on an inflection point to where the higher probability move is back towards 16,780. Therefore, an intraday trader could consider shorting using the overnight highs as risk.
Dow Jones (ticker: US30) Prices May Push Back towards 16,780
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Tomorrow morning, the US non-farm payroll report will be released so anticipate some volatility in the morning. As a result, if we are fortunate enough to take profits at 16,780, then we’ll call it a day. Otherwise, I do want to be flat at the end of today regardless of the trade’s P/L. The risk to reward isn’t there to withstand the whipsaws of the NFP release tomorrow.
Dow Jones Under Pressure After Surging (Yesterday’s Report)
—Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
Follow me on Twitter at @JWagnerFXTrader .
See Jeremy’s recent articles at his Bio Page.