Dow Pattern Structure Signals Further Selling

Following the recent completion of a head and shoulders top pattern (established off all-time highs at 18,464) on the Dow that hit its profit objective of 17,243, sellers could remain in control of this market according to yesterday’s bearish flag pattern completion, formed from 17,010 and 17,653.

According to the bearish flag pattern’s rules of engagement, chart pattern traders will be eyeing as far south as 16,021 (derived from taking the flag pattern’s pole distance and extending this from the breakout point).