The Dow future has seen some pretty nasty swings of late but the overall picture is one of recovery with higher lows being posted on each dip. Also, in the last few days we have finally managed to breach the 12778 area that has been capping us since February. We have a very good intra day level down at 12655 but we have to be careful given the nature of the swings during this bounce. It would be a safer bet to wait for the ascending Channel Support to come into play before getting too involved. We do have Michigan Sentiment today, which is another good reason for caution.
Indicators in Play
In our archives you we see plenty of information on how we use the 38.2 Fibonacci Retracement as a pullback area and also how we flip through time frames. Well our smaller chart today shows the Dow Future quarterly chart going back to October 2002. This shows how we have respected this Fib line which tells us that the recent pain may well be over.
Summary
Now that the 12778 obstacle has been breached we will be targeting higher prices. However, entry points are crucial here with regular sharp pullbacks.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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