Dow 10/08/01

ChartMan

Legendary member
5,580 46
Well,well,well.Nice to get it (almost) right for once.As I suggested in the chat room last night, the drop below support could be a tailfake, and so it proved to be.I sugsted that the target for today may be 400, and the DOW closed at 415.:)
First a horror drop (why was that) to 205 and a nice bounce off there to form a double bottom . I was surprised at the rate of the drop, as well as the extent. I had expected a drop to 250/support, but not to 205 in 6 minutes.I thought that was hello 100, but it was another false move.We rallied on to test 300( as suggested) and a pullback to 270, followed by a strong rise to over 400. This was tested 5 times in all, finally closing at 415, 10 points above the 50% retrace from the current high of 603 odd. Interestingly, the first pullback from the 400 test bounced of the38% line at 364. This was also the current downtrend resistance value.
We now have a major double bottom formed at 210 and this should provide strong support for the coming days.Equally strong is the 38% retrace value of 360 and that should provide immediate support.
Ignoring the big drop today, yesterday's bull wedge gave a target price of 400 from the breakout.Pity about the drop, it would have been a perfect piece of TA.
Next week we could see a nice rise, so long as 400/360 is not breached.Next stop will be 453/464 (82%). That's a strong point to get past. Get past that though and it looks an easy ride to 600.....I guess I won't win the DOW comp on Monday's close with my estimate of 11,060...
 

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