With the third long red candlestick in three weeks, the Dow Industrials is once again testing support in the 11000 area. The senior average first exceeded 11000 on April 14th and then moved into a trading range. While a support break would be short-term bearish, it would not be enough to affect the bigger uptrend. After a 1300 point advance in just 11 weeks, the Dow was overbought and ripe for a pullback or consolidation. Even the best athletes need to rest after long sprints. Should a correction unfold, we can turn to broken resistance and the Fibonacci Retracements Tool to estimate downside targets. Broken support and the 38% retracement converge around 10700 for the first target.
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Click this chart to see the details.
