Technical Analysis of Financial Markets

Tuesday, November 28, 2006

Dow Jones

The Dow has broken and closed beneath the support of an uptrend which saw a rally gaining some 15% in just 4 months. The breakdown of the trend has currently found support at the 14.6% Fibonacci retracement level, or 12116. This breakdown may mark the beginning of a trend-reversal with a progressive downtrend towards support at the 38.2% Fibonacci level; -so as long price action does not trade and close back above the trendline at around 12250. It may be worth noticing how the RSI trendline flipped from support to resistance coinciding with the commencement of negative divergence of MACD against price action as a possible warning of the weakening trend.


Cal said...

great analysis, I couldn't have done it better!

Anonymous said...

Hi Steve,

I also use Fibs a lot in index futures trading, but this is the first time I have seen anyone use the 14.6% RT level.

Most start with the 23.6% level in their analysis.

How did you come about using this level?