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Hugo in HTO Trading,

Dow Jones Industrial Average: Seems unstoppable

Since the beginning of the year the US index gained over 18.0% but last week remained flat with a minor gain of 0.4% in addition the US index continues in a bullish phase since mid-May.

Last week the index rose with a narrow range and closed near the high of the week, in addition managed close above the previous week high, which suggests a strong bullish momentum.

The stochastic continues to show an extreme overbought market and is displaying lack of momentum.

Since mid-April the Index did not make any significant downward correction and continues to push upward slowing down the rising pace sometimes but never making a correction a clear sign that a potential bubble is developing.

Dow Jones Industrial Average is holding above the 10-week moving average that should provide a good dynamic support for next week.

Expecting a downward move to a Fibonacci retracement at 22,650 (scenario 1) on a break below the previous week low at 23,201 however a break above the 2017 high at 23,435 may set in  motion another bullish run to a Fibonacci extension at 24,111 (scenario 2).