Going into next week: The Dow 4

Last week was disappointing for the Dow. Chart below is the 4 hour, I'm using the 4 hour because it shows the price action in a little more detail.

www.freestockcharts.com

As you can see the price action has made a top of sorts above the 14,000 mark. I don't think this top will hold for too long but for next week and maybe the week after I'm expecting a pullback. Fib levels drawn on the top chart are more optimistic than the ones on the chart below. The above Fib levels show 13,600 as the probable pullback low. I say 13,600 instead of 13,750 because the last high was around 13,600. The chart below shows a more pessimistic view, counting the move up as starting a bit earlier. I don't think it's as relevant since the pullback from that move has already happened (it ended where the Fib levels above started).

www.freestockcharts.com

13,600 remains as a point to watch, a little bit higher in this one though; 13,675. Next major point is 13,440. I don't think that the 50% retrace, 13,250, will get hit. It's a possibility of course but I'm thinking that the market will be mostly bullish this year and the pullback coming will be light. Because I'm a little biased you may want to take a slightly more pessimistic view than I am, I try not to be too biased though.

So, what happens if the pullback turns ugly? I have the daily chart below to show some possibilities. Note that I am not expecting this to happen and show it only for the sake of completeness.

www.freestockcharts.com

There are two movements that I find to be likely. First, a continuation of the previous trend, this brings a possible support level of 12,800 or so. The other is a continuation of the new trend, this brings a possible support level of 13,450 or so. That second number is fairly close to the 100 day so I think it's a better level to expect in the case of a larger downturn.

My expectations for next week are negative. I think we'll see the Dow move down a few hundred points to 13,600 or so. This pullback could take three to four weeks though I'm expecting it to take only two. If the pullback is more severe than I am anticipating that it could take three to five weeks; the last large pullback took 27 trading days to complete. You can see that pullback in the daily chart above as the start of the newer trend line on the bottom. I don't have any specific trading plan for next week, the potential pullback offers a good time to take some profits. I would be adverse to transitioning over to cash but lowering your percentage invested might be a good idea. I don't think too many good buying opportunities will present themselves next week but I could be wrong. In any case, I'm looking at next week and perhaps the week after as being bearish

If you have a stock you want analyzed leave it in the comments. 

Do your own research before taking any position. I don't have a position in the DJ-30 nor will I be taking one in the next 72 hours.