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Dow Jones forecast for coming week.

Last week I was suspecting that if DOW does not drop in early days of this week then there is more chance that DOW will test 12600 level in later part of this week.
Last few days moves in DOW were very encouraging but as I said in past it needs to break 12600 level clearly to set a new trend. I have a feeling that DOW is making a short-term bullish pattern though it will be clear in coming days and I will change my opinion about this bullish pattern if DOW breaks 12000 in the downside. If DOW really triggers the short-term bullish pattern then it can go above 13000 but for that it needs to break 12600 convincingly in coming days. In the upside its next resistance is at 12800 level.

During last few weeks I was talking about two future options for DOW. Since it is unable to break 12600 so still it is not clear to me whether DOW is going to make lower highs & lower lows or it is going the make the medium term bullish pattern. In coming days if DOW fails to break 12600 level convincingly then it has more chance to drop and it is also little short-term over-bought condition. 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.

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