Saturday, August 23, 2014

Dow Searching For Secondary Top

The Dow continues its tremendous rally from recent lows. I have stated before that it is my opinion that this is a bear market rally. Has anything happened to change that opinion? Nope, but I’ve sure got a good case of the heebie-jeebies! Let’s revise the charts to see why.
DAILY CHART
What a rally! One last hurrah for the bulls perhaps? I think so, but it’s cutting it close. I have added Fibonacci retracement levels of the move down from all time highs to the recent low. While I expected a deep retracement, I didn’t think it would get this high. I was targeting the 76.4% level at 16958 and I positioned myself accordingly. Then price just seemed to take that level in its stride. I’m generally not a day trader but I was left with no option here. A nice little sell low, buy high action. As Homer Simpson would say, “Doh!”.
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