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. (13300)
If this latest rally creates a new high DOW Theory has failed (Modern day Failure rate less than 20%???) and the bull lives on.

Update of Post #843 Chart (22nd May 2012)