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Attached are three charts of the Dow Jones
Industrial Average.
Figure 4 (indu-02-07-08(4).gif) is the picture
from late 1976 to the present.
Figure 5 (indu-02-07-08(5).gif) is the picture
from 1999 +/- to the present.
Figure 6 (indu-02-07-08(6).gif) is the
present.
What they show, especially Figure 6, is that since
mid-June, 2002, when INDU penetrated its 20 year support trend line as defined
by the intraday lows of July 8, 1982 and November 23, 1994, for the first time
since it was first penetrated during the aftermath of September 11, 2001, INDU
has been trading between the bounds of that support trend line (now acting as
resistance) and an alternate support trend line drawn through the intraday lows
of July 8, 1982, and September 21, 2001.
If the alternate support trend line is broken (and
I would note that it remains inviolate even intraday), the next support is in
the vicinity of 8641 (a 38.2% retracement of the expansion from November, 1994)
and 8350 which represents the extended bottom of the 2.5 year bear channel
(excluding the downside violation of that channel following September 11,
2001).
As previously noted, one of my Fibonacci studies
suggests a bear market to 2014 (or to an equivalent price point in time - with
thanks to Earl Adamy who in a recent post cogently observed that bear markets
can take on one of (at least) two personalities - they may fall
precipitously as in 1929 and 1987 or they may meander downwards and upwards
without new significant highs and mostly sideways for an extended period of
time).
FWIW.
As always, I remind you I am not licensed to say
these things for profit.
Tony Pylypuk
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