Hello there. Welcome to CantosCharts. I'm Steven Mayne, Director of Mayne Financial. And during this section, we're going to look over the pond at the Dow Jones.

As always, I want to start on the biggest term graph, which is relevant to your trading. So we'll start on the monthly timeframe here.

What we can see, and we've spoken about this before in previous CantosCharts, is our final Fibonacci level has been better. It's about 12,550, approximately. We broke above this at the end of last month. And we still remain trading above it, obviously. And America has been open longer than the U.K. has, due to bank holidays.

Something we do note, though. The S&P actually hasn't broken this. I'll show you a quick S&P graph afterwards. What we can find - I suppose for those people who don't trade America, it would be quite useless - is the Dow, the way it's set up, is not a market cap-weighted index, unlike the S&P or the domestic FTSE 100. So sometimes you've got abnormalities in the price. You can see one overextended or not quite extending enough. So go over that and with the S&P.

But just concentrating on the Dow, we remain in a positive price trend. We have done, really, since 2010. You can see that the stochastic, though, remains firmly overbought and has remained overbought pretty much from December last year.

But the stochastic does have a habit, especially on this timeframe, of staying overbought for extended periods of time. So we're normally better off checking the MACD and the RSI. The MACD remains positive, remains blue on the histogram. And the RSI is just still slowly trending up towards these overbought levels.

So really, what we're seeing here is probably this is the last gasp move upwards of the Dow. If we get as high as we were at the recent top before the big banking disasters, obviously we'll be unsure from here. But we're looking for value trades. We know we'll never get every single trade right, so really, if we've got that much move up, pretty unsure from here. I personally prefer a move down, hopefully back towards the 200 simple moving average before moving higher.

Let's go over this last relevant and high, so 11,711.5 is the high. Last relevant low is 11,555.5. It's very important to have these last relevant highs written down when you're trading, so you've got an idea of support and resistance, possible areas where you can start trading again. And we've got a breakdown of stochastics as well. But probably what's more important on this monthly graph is if we look at the S&P, this nice graph we've got here, this is the same Fibonacci re-tracement. And it just really goes back on the line that the Dow can overextend.

So if lately we are trading short in the Dow, it might not necessarily be a time to panic. But maybe if the S&P does close above this level, about 30 and 85, approximately, it might be time to start saying maybe we are going to start moving up further before we start coming down again.

But even on the S&P where we've bought on the stochastic, we're tending to overbought levels on the RSI as well.

Moving on to the Dow weekly, what we can see here is a much clearer break above the final Fibanachi line. But from the indicators, we can see that the stochastic is extremely overbought, even though with the stochastic on longer-term timeframes, this can happen. The MACD remains positive, after the buy signal from the week before. But the RSI is now back into overbought territory.

What will be interesting is when we start eventually getting sell patterns from the candlesticks at these levels on the Dow Jones, negative divergence forms on these indicators. And then really we could start having a situation we saw in 2007/2008 at the tops. We started getting negative divergence on the weekly timeframes on the Dow Jones, and the S&P, on the FTSE, pretty much across the board before we had that big, large sell-off.

So when we are as overextended as we are now, it's really something to look for because that will be one of your first warning signs that it's time to take your chips off the table and start shorting the market.

Just to reiterate what we've gone over, so you've got the exact levels, last relevant high and low clearly marked. Always keep them when you're trading. It's just a good idea. Maybe possible sell opportunities if we don't break highs or if we don't break lows, looking for your shorts and longs when you're spread betting or trading CFDs.

Just going across the momentum indicators, so you've got no clear signal, we're just very, very overbought on the stochastic. RSI is positive terms, but just beneath overbought levels. And on the MACD, we do remain with that buy pattern.

So thank you very much for watching CantosCharts. I've been Steven Mayne from Mayne Financial. And I hope to see you again soon.