There is great uncertainty in equities markets right now with the fallout from the sub-prime owe debacle dealing a heavy blow to the Dow Jones Industrial list. The sub-prime problem gives us a view of the fundamentals but how strong was the technical side for the new all-time high on 17 July 2007? Before we take a look lets quickly review some other areas of analysis using big-picture milestones as a point of compose. map 1 is the daily bar chart of the Dow Jones futures assure (DJ-SpotV) over the past bring together of years. The double bottoms of 20 January 2006 and 18 July 2006 have been marked. These lows came in at 10,680 and 10,730 respectively. The top between the two lows. 11,700 came on 10 May 2006. The reference range from the first of the lows to the top is 11,700 10,680 = 1020 points. Add 200% of this range to the 18 July low we come up with a 200% target of 10,730 + (2 x 1,020) = 12,770. Chart 1 Dow Daily Bar map manifold furnish
The top on 20 February 2007 was 12,815 very close to the 200% target factored from the Double Bottoms. The 200% command for manifold Tops and Bottoms is David Bowdens command and it worked extremely well here. map 2 shows the latest market action and the all-time high of 17 July this year. The period from the 18 July 2006 low to the 20 February 2007 high can be used as an historical reference be for considering current market conditions. This be is 12,815 10,730 = 2,085 points. map 2 Dow Jones Daily Bar map Current merchandise Action
Taking our compose be and adding it to the 5 walk 2007 low (12,030) we get a target for a repeating range of 12,030 + 2,085 = 14,115. The July 2007 top is in displace at 14,097 close enough to a repeating range to act me happy. It should not have escaped your attention that it is also basically a one year anniversary from the 10,730 low to the 14,097 high! Thats a definite time and price set-up on the Dow. I query whether the sub-prime owe players actually knew about it!The Dow could be in some affect. After the sign sell-offs from the July top it will take a lot to pick itself up off the floor. These are very interesting times. The best (for bears) and worse (for bulls) may be yet to come. Until next measure remember Gann rocks!Noel Campbell Trading Tutors
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