Last week I was talking that if DOW does not break 12600 then there is a good chance that it may drop in middle to later days of this week.
DOW is trying to break 12200 level and in early days of the coming week if it drops more then there is a chance that it will test 11800 level in the downside. If these drops continue then we need to consider the lows of year 2011. But as DOW is following higher highs and higher lows trend (in long-term chart) from year 2009 so if it still maintains that trend then I don’t think that DOW will test 2011 low levels. Around 11860 is the 50% Fibonacci retracement level for DOW but if it goes more then 11506 is the 61.8% Fibonacci retracement level. I think for now the worse case scenario is 11200. Though I am giving lower levels but I feel emphasis should be given on 11800–11850 level in the downside.
Now if DOW does not drop more in early to middle of the coming week then it will again try to test 12600 level in the upside and then next resistance level is at 12800. If in early days it test little more low levels and then again test higher levels in later part of the coming week; therefore the resistance level will be at 12400.
During last few weeks I was talking about two future options for DOW, now I think chance of creating lower highs & lower lows trend is more than the positive pattern which I was expecting in past. Coming week may give us a solid hint of that.
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