Fibonacci and the Dow

by JC Parets  -  July 5, 2019

I can’t think of a better time to talk about Fibonacci Extensions .

Fibonacci Extensions are tools traders can use to establish certain ranges for a price. They’re named for the analytical forecasting sequence the great Italian mathematician Fibonacci established at the beginning of the 13th century.

Using Fibonacci Extensions is somewhat controversial in technical trading. However, I think they’re a huge help when we’re looking for targets within an ongoing market move . Or if we’re trying to find an upside target within an ongoing uptrend, or a downside target when a price’s path is looking more bleak.

Anyway, the reason I bring these up right now is that the Dow Jones Industrial Average is fighting to break through an important cluster. And it’s a cluster of extensions that stem from our last two epic peaks, in 2000 and 2007.

A breakout above 27,000 could spark a new cyclical bull market that we believe falls within the context of an ongoing structural bull market. In other words, this is a more intermediate-term breakout (years) while structurally (decades) we have already been in a bull market since arguably 2013 or even 2016.

In this video I talk about two key extensions: 261.8% and 423.6%. Which is exactly where the Dow stopped going up in early 2018.

Was 17 months enough time at these levels before we can move on? Let’s discuss .