On Wednesday, 11/11/09, the Dow Jones Industrial Index rallied to a 50% retracement level based on MarketClub's Fibonacci measuring tool. The action today indicates that this level is very important and that it could be an important top for this market.
In my latest video I cover both the Dow and the S&P 500 and tell you what I think is going to happen to both of these markets in the near and intermediate term.
Of the three major indexes we track: DOW, NASDAQ and the S&P 500, only the NASDAQ is in thin air.
What do I mean by thin air? So far the NASDAQ is the only index to make it past the 50% Fibonacci retracement levels as measured from the highs seen in 2007 and the lows that were made in March of this year.
Both the Dow and the S&P 500 have rallied strongly from their March lows but have not made it over the 50% retracement level.
Many professional traders - myself included - are looking at the NASDAQ's Fibonacci retracement as it represents a potentially key turning point for this year's market.
It seems to me that we are at an inflection point in the economy. The government has blown pretty much all of its money and the economic recovery and the economy is still sputtering along. No surprise there.