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Dow 22,000 within Striking Distance
08/01/2017 2:59 am EST
For us, it’s not these round numbers that matter but rather the Fibonacci price targets that we had set out. This move to the upside is still not yet done, says Mike Golembesky, an Elliott Wave analyst who covers volatility indexes and forex.
The Dow Jones Industrial Average (DJI) closed at a new record high on Monday, July 31 closing the day just under the 21,900 level.
The intraday high on the Dow came in at 21,927 which was just 44 points under the bottom end of the 21,971 - 22,429 target zone that we had set out for the Dow quite some time ago. The Dow is now within striking distance of hitting both the 22,000 milestone level and my larger degree target zone. There is still likely some upside business that is still unfinished on the Dow prior to seeing that top.
There has been no shortage of excuses as to why the U.S. Equity markets were sure to crash over since this rally began in 2016. These excuses have continued over the past several weeks many of which I have noted in my previous articles.
We have seen the pundits look for continued chaos in Washington to have some kind of disastrous effect on the markets. We have seen analysis look towards the weakening of the U.S. dollar to be the next potential catalyst that will surely bring down the markets.
As is evident by the continued push higher on the Dow, these events simply had no effect on the Dow's continued path towards 22,000. As we close in on our target zone for the Dow, it seems the focus is now on the new record highs and large round number milestones.
The excuses as to why seem to be in short supply. Of course, once the Dow does indeed top and the public is demanding answers, the pundits will no doubt once again find a vast supply of reasons or excuses.
As noted above, the Dow came within just 44 points of hitting the lower end of the target zone that I had laid out several weeks ago.
The smaller degree pattern up off of the June 29 low has been somewhat sloppy. For that reason, I have been more focused on watching the larger degree support zone help give guidance as to whether the Dow would fall short of seeing its target zone prior to topping.
So far this week the Dow held well over that 21,250-20,085 support zone and continued to push higher.
While the pattern is still somewhat sloppy off the June 29 low, it does still look incomplete off the April lows. And, we have still yet to hit the ideal Fibonacci price levels, so I am still leaning towards moving deeper up into the target zone prior to topping.
Additionally, with this continued move higher I am now able to move the smaller degree support up to the 21,523 -21,250 zone. A break of this 21,250 level would now be the initial signal that the Dow may have topped with further confirmation coming with a break back under the 21,070.
This is where we begin watching the downside targets and keep a much closer eye on the larger degree support levels which come in at the 20,063 – 19,311.
And 22,000 will likely fill the newswires. But for us, it’s not these round numbers that matter but rather the Fibonacci price targets that we had set out some time ago. So, while I do become more cautious as we enter this zone until we see a break of the 21,250 level, this move to the upside is still not yet done.
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