Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Northern Vertex Files Preliminary Economic Assessment Report for the Moss Gold Mine in NW Arizona
By: Northern Vertex Mining Corp.

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dent’s Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOIN…. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
Dow – Is It Back To Buy The Dip or Time To Sell The Rip


 -- Published: Wednesday, 6 September 2017 | Print  | Disqus 

By Mike Golembesky

Last week The Dow Jones Industrial Average saw a peek high that was up just over 400 points off of the August 21st lows. This move represented a percentage gain of just under 2% during this 2-week period. Furthermore, this move higher off of the August 21st low retraced exactly 76.4% of the move down into those August 21st lows off of the August 8th highs. The Dow then turned down at that 76.4% retrace level almost to the tick on Friday, September 1st ending the session at 21,987.

So the question for this post-holiday week is will the Dow continue to reward traders who have been buying every dip or is it finally time to sell the Dow on this rip back higher?

I’ve been writing about how the press loves to assign exogenous news events to the price movement within the financial markets. Since the run up off of the January of 2016 lows, we have seen several of these news events occur. From Brexit to the U.S. Election to the Russia Scandal we have seen several "bombshell" news events that were all supposed to crash the market. None of these news events did crash the market as the pundits were so sure that they would as the market continued to grind away higher and higher.

Now that the Dow has finally moved lower after so many months of just grinding away higher and higher, the pundits are now assigning the escalation with North Korea as the reason for the Dow’s move down off of the 22,179 high. This 22,179 high had been an ideal target zone for quite some time and long before the most recent Escalation with North Korea had even been in the news.

In fact, on July 11th of this year when the Dow was trading at 21,408 and a month prior to the top at 21,179, I had written:

"If the Dow is able to follow-through in an impulsive pattern up off of that April 18th low then we have an ideal target zone on this smaller degree timeframe right in the 21,971-22,429 zone. This zone has excellent confluence with our larger degree Fibonacci target level of 22,176 as it falls right with that smaller degree target zone."

If the 21,179 level was indeed the top of the larger degree third wave as noted on the charts below, then the target level that I had laid out on July 11th would have been within 3 points of the actual high. Again, this was long before the current North Korea escalation had been in the news. The targets that were laid out were based purely on our Elliot Wave analysis and our Fibonacci Pinball targets. These tools help us measure sentiment in the market based on what we are seeing in the charts. So rather than rely on some exogenous news even we simply rely on measuring market sentiment.

The Dow does still have a bit of work to do before proving that the 21,179 level was indeed the top of the larger degree third wave, but hitting the ideal target within 3 points is certainly a warning sign that should not be ignored.

There are two distinct paths that I am currently watching on the Dow. These paths are shown in green and white on the charts below.

The green path would suggest that the Dow has already made a larger degree top in wave (3). This should then result in correction down towards the 20,063-19,311 zone for wave (4) prior to turning up again into 2018.

The white path would suggest that the Dow still needs one final push over the 22,179 level prior to topping in wave (3) before seeing the corrective move back down towards the 20,063-19,311 zone.

Both of these scenarios are suggestive that the Dow will see lower levels into the end of 2017. It is really just a matter of whether the pattern needs another minor high prior to seeing the larger degree top for wave (3).

The initial move down off of the 21,179 level was corrective in nature, and the Dow has so far held over the smaller degree support level of 21,286. So for these reasons we still do not have initial confirmation of a top being in place just yet. 

The next signal that the Dow has indeed topped would come with a break of the 21,673 level followed by a break of the 21,597 level. If those two levels can break, then I will once again focus on the 21,286 level as the next signal that we have indeed struck a larger degree top for wave (3). Although a break of the 21,286 level would signal that we have indeed struck fairly significant top, as long as the Dow is able to remain over the long term support levels at 20,063-19,311, there are still likely higher levels to be seen into 2018.

So while traders looking to sell the rip may have their moment in the near term, it would be wise for them to not overstay their welcome. 

See charts illustrating the wave counts on the Dow.

Mike Golembesky is a widely followed Elliott Wave technical analyst, covering U.S. Indices, Volatility Instruments, and Forex on ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

 


| Digg This Article
 -- Published: Wednesday, 6 September 2017 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.