Dow

[Hoop]

Dow closed at 12742 today ... Recent media is signalling that the correction is overAll the buy triggers have gone off
Hmmm ...they assume the DOW and S&P500 is still in a Bull Market Cycle.


OK the 21st Century debate consensus is that the DOW theory is not as good as it used to be....

If the DOW theory is correct however ......the correction has not ended, it has begun in a form of a bear market rally (sucker rally). TA buy triggers go off with these types of corrections too.

So whatever you believe is happening atm just be careful around certain resistance points. Fibonacci Retracements between 1/3 and 2/3 area are typical secondary correction perimeters Since the retracement off the bottom has passed through the 50% the next area to watch is the 61.8% which is the 12850 area (not shown on chart). 13000 is another resistance area... both these areas are investor behaviour sensitive (psychological).


If this is a bear market rally expect the rally to peter out below the previous high.
If this latest rally creates a new high DOW Theory has failed (Modern day Failure rate less than 20%???) and the bull lives on.

This rally has topped out at 12837 (closing high) very close to the Fibonacci 61.8% retracement level.
The DOW had its 2nd worse fall of the year saved by the bell again finishing at 12574 down -251 (-1.96%).

Is this the end of the rally?..............Maybe, maybe not, it could be a pullback to test the neck line support*** around the 12530-12540 area... factoring in this terrible day, technically speaking this rally did not break-down..it is still intact. ....(as long as it stays above the neck line support)

***Looking at the above chart, the head (inverted) formed at the beginning of June 12035 and the neck and shoulders are around that 12400-12550 area either side of the head. (Mirror image)