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The Dow has created what looks like a very large mega-phone pattern. This pattern was discussed four months ago, giving investors key big picture perspective as the Dow was hitting all-time highs (See here)
The Dow over the past 5-years has rallied from support to resistance of this pattern. The Dow could be breaking support at (1), with momentum hitting lofty levels.
The right chart highlights that the Dow recently hit dual long-term resistance lines, one dating back to the 1987 highs and could be breaking support at (2).
These are “monthly” charts and the month is only half way over with. If the Dow closes the month below the support lines dating back to the 2009 lows, it would be considered a negative for the big picture.
Stay tuned, this results of this mega phone pattern is very important for the big picture going forward.