The DJIA seems to be the better guide thus far. It is finding support and resistance at the 50 day ema and 200 day ema while also coinciding with Fib levels. The chart below shows how terrific this index has been for technicians. MFI recently traded above 80 which is not an everyday event for this index. With that said, MFI getting overbought is often a prelude to another push back toward those overbought levels (from an index price standpoint) but with MFI being less overbought. Sometimes the market will actually make a higher high and sometimes it will just get close. The chart below shows what might be an interesting scenario. Around Thanksgiving, the upward sloping neckline crosses what is perceived to be an important area of resistance (red horizontal line). 12347 also happens to be the 78.6% Fib retrace level. If in fact the market does test that area, whether it be late Nov. or early Dec. while MFI is still lower than the recent overbought level, it will make for a possible top. Also, keep an eye on MACD which if lower at that that point in time will be added confirmation. Of course, a lot can happen between now and then and I will never invest based on a forecast that has yet to be confirmed. It is just something to keep and eye on. That is why the blog is called, Trust but Verify. Trust the charts but verify with indicators. One needs both in order to be a successful technical investor.
Nice job with the chart. I do appreciate it. Thank you !
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