DOW at critical support, NDX reaches Fib-extension

We’re not the ones to post a lot and by doing so get lost in the day to day noise. We believe staying focused and looking for major inflection points is where the real money is made. That said, today the DOW found support right at a very critical trend line: it is the white trend line that connects the 2014 and 2015 lows, as well as the (red) trend line that connects with the price top made in 2010 (P-I) and which runs parallel to the upper (red) trend line connecting the (blue) P-III high with the 2007 high. These are major long term trend lines and thus very important. That’s when we start to get really exited and pay attention.

dow daily

In addition, the NDX reached, and in fact went slightly below the (red) intermediate c=2.618x extension, measured from b (the late-December high). These are extreme fib-extensions for c-waves, though not uncommon and may mean the selling has gone a bit too far and too fast and as such a relief rally could very well be in order. Cont’d below.

ndx

For the NDX a retest of the lower yellow trendline (in place since the late-2012 low) may well be in order. Often it will then fail to reclaim that trend channel, roll over and … drop below the yellow major “a?” label. The bounce high will then be labeled major b, and the next wave down major c of Primary A.

That’s all for now, but before we can claim any true bottom of sorts we do need to see some higher highs and higher lows first with price first taking out yesterday’s high, followed by last Thursday’s high. Then we fell much more confident a larger bounce (150-200p on the S&P500) is underway.

 

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