Dow Jones on record high, that's where we can position with long positions

The Dow Jones Industrial Average closed at a new record high on Monday, July 31st finishing the day just under the 21,900 level. The intraday high on the Dow came in at 21,927 which was just 44 points under the bottom end of the 21,971 - 22,429 target zone that we had set out for the Dow quite some time ago.

We have seen the pundits look for continued chaos in Washington to have some kind of disastrous effect on the markets. We have seen analysis look towards the weakening of the US dollar to be the next potential catalyst event that will surely bring down the markets. As is evident by the continued push higher on the Dow, these events simply had no effect on the Dow's continued path toward 22,000.

Additionally, with this continued move higher I am now able to move the smaller degree support up to the 21,523 -21,250 zone. A break of this 21,250 level would now be the initial signal that the Dow may have topped with further confirmation coming with a break back under the 21,070. This is where we begin watching the downside targets and keep a much closer eye on the larger degree support levels which come in at the 20,063 – 19,311.

22,000 will likely fill the newswires, but for us, it’s not these round numbers that matter but rather the Fibonacci price targets that we had set out some time ago. So while I do become more cautious as we enter this zone until we see a break of the 21,250 level this move to the upside is still not yet done.

Source: Investing.com

Jr Trader Petar Milanov

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