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Let's do a pivot and fibonacci "what if" scenario on the Dow Jones
Industrials. The question is just how close is 7400? Since chart aficionados
have perspective on historical prices and can see a 9300+ high, 7400 is almost
2,000 points lower, and in time it has happened rather fast. Now then looking
at the INDU on daily pivots and weekly and monthly fibonacci zones just how
plausible is 7400 or lower in the month of October? Looking at the daily
pivots(chart on next email) we see that 7400 is at S3 tomorrow, 10/8/98.
Looking at the weekly fibos 7400 is at the lower edge of this week's fibo
zone. Looking at the monthly fibos, 7400 is at first fibo support zone.
Given the volatility we have seen in the INDU we could see 7400 to 7200 on the
weekly fibos in the next two days and 7400 to 7000 on the monthly fibos in the
next three weeks. Psychologically, those in denial see 7400 far away, but for
mechanical traders it is rather close.
BobR
http://www.oextrader.com
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