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The DOW has reached a significant Fibonacci confluence resistance area
(cluster), marked on the chart below with a horizontal red line.
This resistance is stronger than other resistance areas on the way up
since Oct 10th
because multiple Fibonacci
resistance areas are located close together.. For the last 6 days
the Dow has resisted in that area. Some oscillators are rolling
over, triggering short-term sellers and mechanical systems. Soon
longer-term investors and traders will consider selling. Already we
have benefited from short-selling intra-day when the DOW is at this
resistance area. We are setting up for a retracement on the daily
chart.
http://www.fibmarkets.com/YaBBImages/Attachments/021028_dow_res.gif
For DiNapoli traders, there is also a potential Double-RePo look-alike
pattern on the daily Dow chart. This is a signal to sell short at these
levels. The first profit objective for this pattern is in the 82.50 area,
and the second one is around 80.60 .
Where will we find support if this retracement does materialize? The
current support levels for the daily chart are as follows: 82.50
80.60 80.40 77.30 74.00 72.00 66.90 these are approximate (rounded), and
subject to change if the recent high of 85.89 is exceeded.
-Neal.
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