DOW INDUSTRIAL: AMID RECENT SWITCHES, TRADERS TURN TO CHARTS
The Dow Jones Industrial Average 
DJI slipped about 7% from its record daily high on July 18 to its panic low on August 5. Since that low, the blue-chip average has gained as much as 6.4%.
The price closed at 40,890.49 on Wednesday, just 0.75% below its July 17 record closing high of 41,198.08 and 1.17% below its intraday record high of 41,376.
In addition, the Dow is now on track to close above the psychological 40,000 level for the second week in a row. To date, the Dow has not closed above this level for more than two weeks in a row.
In any case, traders are closely monitoring support and resistance ahead of Fed Chair Powell’s highly anticipated speech at the Jackson Hole symposium on Friday:
Above Wednesday’s high (40,974.40), the Dow is close to its July 31 high (41,199.63), followed by its intraday record high (41,376).
In case of new highs, there are two weekly resistance lines on the logarithmic scale that would represent hurdles. One line, starting from the 2000 high, is around 42,400 this week, while the other, starting from the 2007 high, is around 44,100 this week.
In the event of a further downside reversal, the August 15 gap will need to fall to 40,068.75 to fill it. However, the Dow will try to use the 40,000 area as support.
A particularly important area is currently considered to be around 38,750 to 38,400. This zone includes the support line from the April low (currently ~38,750), the intraday low from August 5 (38,499) and the rising 200-day average (~38,400).
If the Dow moves out of the area defined by these levels at the close of trading, it would indicate the potential for a much larger sell-off.
(Terence Gabriel)
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FOR THE PREVIOUS THURSDAY LIVE MARKET POSTS:
Arguments for a better balance between expensive technology and defensive measures – click here
FROM NATWEST TO BAE: ACTIVE FUNDS WITH INCREASED UK EXPOSURE – CLICK HERE
DOLLAR BULLS – CLICK HERE
RETAIL MARKET PUTS STOXX UP, MINING COMPANIES DOWN – CLICK HERE
Lukewarm start in Europe on offer – click here
It is slowly starting to look like interest rate cuts – click here
