Wednesday felt like an inflection point in gold and the INDU with both breaking important trendlines. As there is alot of ground to cover tonight lets get right to the charts starting with the daily look at the INDU. Today the INDU finally closed below the bottom rail of the now seven point bearish falling flag and the double bottom trendline at 16,920. This was a big deal IMHO. We may see a little backing and filling in this general area but today’s move clearly setup a pattern of lower highs and lower lows. Note the six point bearish falling wedge that formed back in July of last year. As it formed below the previous high it needed an even number of reversal points to complete the pattern to the downside. Because our current seven point bearish falling flag formed at the top it needed to have an odd number of reversal points to make a reversal pattern. One last point on the chart below which shows two red arrows one point up and the other pointing down. As you can see the rally out of the low made in October was vertical only taking three days. The red arrow pointing down shows how it’s possible we may see the INDU reverse symmetry back down over the same area as shown by the red arrow pointing up.
This post was published at GoldSeek on 7 January 2016.