dow 30/07 01

ChartMan

Legendary member
5,580 46
I figured out tonight why things weren't going to plan . I was playing with the Fib. retacements and wondering why the dow was not corresponding to any significant values, and why there seemed to be action around the 50% mark.Then I got it. A new cycle has been established so the retacement points need to move on.(see the attached chart).It would seem there is now a new high (462) and a new low (208) from which to derrive retracements.How and when these new points come into force, I'm not sure.....But if you believe in Fibonacci retracements, then that's all you need to know.Maybe I'm just confused......as I got it wrong this afternoon and took a 24 point loss just as I thought it was going to break. Good job I put in my automatic stop sell as it crashed from 435 to 364...I was surprised because the dow had tested 400 support 4 times the previous day and again just prior to me going long.Safe enough I thought.....Strong support was found at 364 (38%) and immediately climbed to re-test 400 (23%) again, but this time as resistance instead of support.
There were minor excursions and falures, but ended up at 400.
The big question for tomorrow is this. Is this 400 now going to be support or resistance.? Do we have a continuation pennant from the up channel from 208?Do we have a continuation of the down trend line from 676?
I have to say I don't know.I guess sentiment is positive so I'll err on the side of optimism and say pennant and up. Again the 400 point is crucial. If that provides support for an upward movement, things will be easier to see.
 

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