| |
| |
Chris Kimble, a 30-year+ market technician and student of Sir John Templeton, takes a look at my favorite index and its encounter with muscle-bound resistance. In his comments below, he suggests some potential downside targets if support fails.
Chris explains: Harvesting of stock positions was a good move towards the end of April (see Fear the Techs and Be Prepared) due to 10-year falling resistance and Fib retracement level and resistance dating all the way back to the 1987 peak.
For the past few weeks many of my charts (see Just a Pinch More) have shown that a potential of a head-and-shoulders top could be in the making. The Dow Twins and Twin Fib charts show the probability that the right shoulder is in place.
For the head-and -shoulders to prove itself, the index price should break through the neckline on the downside, as illustrated in yesterday's Be Prepared update.
I have received emails from around the world asking "where does support come into play should the neckline be taken out?" The chart above is my best guess as to the possibilities.
Since we are on the theme of long-term charts and support levels, the 70-year Dow chart from last month illustrates that long-term support can extend over several decades.
|
|
