Dow Jones Industrial Average broke its declining trendline Monday, surging strongly, but light volume indicates hesitancy on the part of buyers.
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
Asian stocks reacted with enthusiasm but Shanghai, after gapping up at the open, fell sharply, giving up most of its gains. The ASX 200 response was muted, with a narrow range and low volume indicating hesitancy from buyers. Reversal below Monday’s low of 4150 would signal another test of 3850. Failure of support would offer a target of 3600*.
* Target calculation: 3900 – ( 4200 – 3900 ) = 3600
If the XJO fails from here it is a H/S formation from 10 August on the charts and the initial target would be around 4090, which is also around the middle of the channel. LIght volume always is a worry though if you were a bull.
Please check your initial target calc — 4090 may be a typo.