The Dow Jones Industrial Average has opened slightly lower on the day as several economic data released from the US have been largely lackluster and uninspiring. Most of the headlines from the US come from the unfolding political drama. The US House of Representatives, under the control of the Democrats, have instituted impeachment proceedings against US President Donald Trump. This is after the release of the full text of the complaints of the whistleblower who brought to light a contentious July phone call between President Trump and his Ukrainian counterpart, Zelensky.
The whistleblower complaint alleges attempts by White House lawyers to delete electronic records of the phone call. Trump is accused by Democrats of seeking a personal favour from a foreign President to take down a political rival.
The Dow is trading near its all-time highs and even though the long-term uptrend is still intact, the Dow is starting to show signs that it is very close to the top. A look at the weekly chart will show a huge rising wedge which is still in evolution, as well as a lower top within the wedge, suggesting that highs are progressively getting lower in the medium term.
Several key levels are still at play. A resistance level at 26,978 has served to cap the price action of the last 48 hours. Near-term support lies at 26704 (low of week ended July 7) and below this level, price is expected to at least test the lower wedge border or the horizontal support at 25,399.
A leg up above 27,300 will push the Dow above the wedge’s upper border and into new highs, which will invalidate any near-term bearishness.