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.
This post was published at GoldSeek on 6 September 2017.
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