Chart of the day

DJIA is testing the strong upside resistance of 37000 which is the historical top. To extend higher, we must see a confirmed break above 37000 to confirm that we will have the fifth upside wave extension to target 37500 but the reversal here will lead to a swing down. CPI numbers in the US come lower but not much lower to justify the FED cut soon, and we will have an FED meeting today.

A rejection here does not invalidate the fifth wave it just means it is finished. We need to see a clear confirmed break below 35000 for the upside fifth wave to be confirmed as finished and for the short trade entry medium-term to be justified. Until we see a break above 37000, we will be in a swing range and can only trade swing short or long and I expect a pullback here.

Short trades could be opened here with a stop just above 37300. Long trades should be opened only upon a break above 37000 and stops taken out. The instrument is making a key consolidation ahead of the directional trade.