The Dow: Projecting the Probable Path of Price (Part 4)
12/18/2008 12:01 am EST
I mark both a sharp rally and a sharp decline right after the inauguration because the Energy Point marks this as an area where price will either change trend or accelerate. It should not surprise you to see an Energy Point coinciding with the Presidential inauguration. Many wonderful traders have concluded that price and time contain all you really need to trade successfully. I’ll let you decide whether the Dow is more likely to rally or sell off immediately after our next President takes office.
Let’s take a look at one last chart:
Here is a chart showing straight-line paths to Energy Points, either where the hallway meets the down-sloping red Median Line, or Energy Points above or below the hallway. You can think of these Energy Points as the likely attractors pulling on price as it moves along the hallway. I did not add an arrow showing the possible path of price ending at the Energy Point in the 5800-5900 area; in truth, it was an omission on my part when I marked up the four charts for this article.
Does that mean I think price won’t be attracted by the Energy Point down there?
Even though I spend many hours a day charting and pouring over charts, I am a trader, not a prognosticator. I play “What if” throughout the trading day, but the truth is always the same: The market is always right. Price will go where it is going, no matter what line I draw or what price I circle.
I wish you all good trading!