Chart Book | Chart of the day: Dow Jones Industrial Average

With a National Day holiday this week on the mainland, we look across to some important foreign markets, today the Dow Industrials. Good volume this year, despite some of the lowest observed volatility on record, as it managed to post an eighth consecutive bullish quarterly candle. Despite record bullish momentum it is more overbought on a monthly basis than it has been in more than 20 years as it prints a sixth consecutive higher monthly candle. We remind readers of the Rule of Eight (to 10): If a market moves in one direction only for between eight and 10 consecutive periods it is overbought and due a correction. This is the case here and with the S&P 500.

Nicole Elliott is a technical analyst