Hello, and welcome to CantosCharts Masterclass. I'm Sandy Jadeja, Chief Technical Analyst for City Index. And welcome back to another lesson in technical analysis. As always, these are simply for information and educational purposes only.

We are going to continue with a market review. There are some really interesting setups that have been occurring in the market for the last few weeks. But I do believe we're going to see some increase in volatility. We have seen that in the currencies. But also I believe we're about to see that in the indices as well. Well previously we took a look at the FTSE 100. And right now we're going to take a look at the Dow Jones.

This is the weekly chart. You can see it's had a 96 per cent gain since the major March low, which was at 6469, and that was in 2009. A lot of people believe that we are going to break to new highs. I think otherwise. I think that the market is creating a nice A, B, C, D pattern. But it's also at key resistance levels. I think there is a possibility for further upside, but it's looking a little bit hairy for this particular market right now.

So this slide here, we can see that we have had resistance at 12,545. That was our target previously. And that has been reached and succeeded, so that's quite good. So does that mean that there is still further upside for the Dow? Possibly, if this market continues here, it continues the bull strength. And I think we could be looking at the 13,270, which is the next resistance point.

But what other information do we have? If you take a look at the moving average, the market has clearly stayed above that, so that is still a bullish factor. We have higher highs, higher lows. That's a bullish factor. So chances are that we could continue higher.

But because we're in the resistance area, we might be looking for a reversal, for either a short-term or an intermediate-term pullback. For that to take place, we would need to see a break below 11,055. That's the recent pivot low. If the Dow takes that low out, because that's a very, very good support level, then that would suggest that the 12,545 level is indeed an intermediate-term resistance level. And that would also suggest that we could be heading back down towards the 11,258 area, which was the previous resistance, which could become the potential support area.

But a number of things that need to take place. 11,055 needs to be broken. The Dow needs to close below the 20-week moving average. And that would suggest that the intermediate-term trend has changed. Otherwise, it's still onwards and upwards for the Dow, until we see those conditions take place.

Also, the parabolic SAR has been taken out on the upside. That is suggesting a bullish move as well. You can see the parabolic SAR on the downside. There is quite a way to go. And this is very similar to other indices. We had looked at the FTSE 100 in the previous lesson. So we had a force break on the downside recently. But if you had taken a loss, this has surely been catered for with the recent up-move.

So I think there are some good moves coming up right across the board, in both the U.S. and the European indices. Here at Cantos, we're going to keep a close eye on these markets.

This is a daily chart. As you can see, we are trading above that 12,545. If we start closing below that 12,545, then this could have been a bull trap - or a bear trap, I would say because the way it looks like is that the bears are trying to get this market down. They've been stopped out, whereas the bulls would have been trapped out because they would have been expecting a move to the upside. This is a very, very tricky market right now. Until we get back down below that 12,545, we could be seeing some increase in volatility.

So the 12,093 is the key pivot level. If we take that low out there, then that would also suggest that this Dow has had its move to the upside completed. So right across the board, we are seeing some really interesting moves. And I think we're going to see that increase in volatility.

As always, use the multiple timeframe analysis to figure out what the long-term and the intermediate trends are doing. And use the short-term timeframes for entries and exits. And of course, use the technical tools, like the moving averages and the parabolic SARs. There are a number of other tools you can use, the MACD for divergences as well. And then of course, remember to use stop-loss and always keep it simple.

I hope this has been simple for you. I will certainly take a look at these markets in the next few lessons to see where we stand and see if we can find some potential trading opportunities in the next few weeks ahead.

In the meantime, have a great trading week. I look forward to seeing you in the next lesson.