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Important highs and lows have taken place along line (1) since the late 1930’s. Last year the Dow hit this line and backed off the following few months and then in late March of this year the Dow hit this line again and has been soft since.
Now rising support is coming into place at line (3). The choppy action over the last few months could well have to do with lines (2) and (3) coming into play!
A decline to the bottom of the channel would catch a few by surprise as well as a break above resistance could well suprise a few as well, as sentiment surveys right now reflect bearish sentiment numbers are growing.
The support and resistance lines have a good deal to do with the narrow choppy action over the past few months.
It sure would be one wild ride ride if it fell down to the bottom of that channel. I’m sure the vast majority are expecting that could never ever happen. Some may well call it armageddon.