Dow Jones: Breakout Watch as Pressure BuildsWall Street CFDFOREXCOM:US30FOREXcomSitting in a protracted downtrend and wedged up against downtrend resistance, a breakout in our Dow Jones contract may soon be on the cards as the price nears the key 45000 level. While the price action and momentum indicators suggest risks are skewed to the downside, in this unique market environment, a bullish breakout hardly seems a stretch either. On Monday, we saw a bullish breakout attempt fail, with an initial rally reversing sharply from a resistance zone comprising the March downtrend, former horizontal support at 46500, along with the 200DMA. For bulls, that’s the zone that needs to be overcome to build confidence that the lows are in. With the contract now sandwiched against the downtrend, price action over the remainder of Tuesday looms as important. A break and close above the 200DMA would signal that a new trend may be underway, especially if accompanied by a successful backtest and bounce. If that were to occur, 47200 and 48230 are minor resistance levels before the 50DMA comes into view. For bears, you’ve had a good run from the record highs above 50000, but a key downside test of the trend sits at 45000. While the price bottomed at 45170 on Monday, coinciding with the low set on October 10 last year, it’s the former that looks far more formidable, having acted as resistance for lengthy periods before eventually breaking, followed by a backtest that held. A sustained break beneath 45000 would open the door for a potential run towards 43850 or 43120 initially. The message from RSI (14) and MACD still leans bearish, although with both now flattening out, downside pressure is no longer building. In normal circumstances, that would favour short setups over longs. But this is not a normal circumstance. Good luck! DS