Of course I'm betting that price will follow one of the yellow lines, but let's talk about why...
Drawing the with the Fibonacci Tool with the correct ratios has a profound effect - you can start to see where the market will reverse with surprising accuracy, even when the market is creating new highs. To set our Fib tool we use these ratios: 0 - Trend Beginning .382 .5 - Half (not a harmonic number, but I find value in having it) .618 1 - Trend End 1.618 2.618 3.618 4.618
We can then use the tool to look for new resistance/support that has not been drawn yet.
:PAST: Drawing A to B shows us the next resistance at the 1.618 line. It hit and reversed at that point (around 350 points off) SEE CHART :PAST: Drawing C to D shows us the next resistance at 1.618 as well, where price resisted and was able to break through to the 2.618 (around 80 points off) :PRESENT: Drawing C to E will show new possible support/resistance- We would normally use past values to draw this, but there are none! -------------We may even look further for the .886 retracement (not drawn) and the .786 retracement (also not drawn) for price to bounce and resume upward. ---------------------- : FUTURE: Drawing from (new low point) to E will show us the next possible stopping point for the DOW
This is all due to @cdschultheis HE PREDICTED ONE OF THE BIGGEST CORRECTIONS OF THE DOW, AND DIDN"T POST IT. hahahaha
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Not going to happen anytime soon with Trump in office - it would need to go below the price when he took office.
Look for the same measurement C to D to have some sideways movement at 3.618
@andrewau2014, of the time it takes to grow, it usually takes half the time to correct. so around 500 days. Looking at this again though, and realizing the implications - it would drop below the price when Pres Trump took office I completely withdraw my prediction of it dropping this far.
That being said, I still believe in the way that it's drawn from C to D, and will be looking for another correction at 3.618 :)