The Dow Jones Industrial Average has survived several market scares over the past 5 decades, including the 1987 crash (Black Monday), Tech Bubble, Financial Crisis, and Coronavirus crash.
In a very noisy, news-driven world, sometimes it pays to simply zoom out on the charts and stop thinking about trading every headline.
Today’s chart is a “quarterly” chart of the Dow Jones Industrial Average (spanning the past 50 years). It includes some relevant Fibonacci price levels for active investors to consider; we apply Fibonacci to the quarterly lows of 1974 and the lows of 2003 and 2009 (that being 100%).
Note that the Dow Industrials hit the 423% Fibonacci price extension earlier this year at (1) – roughly 30,000. Note as well that a significant decline followed. The Dow Industrials are testing this level again right now.
If the Dow Industrials succeeds in breaking above 30000 (on a quarterly closing basis) it could signal a super breakout and much higher prices as indicated by point (2).
The box to the right reflects a few extremes that are in play, as the Dow is testing this multi-decade Fibonacci extension level.
As mentioned in the box, these conditions don’t matter, until they matter.
Will they matter sometime? Guaranteed they will somewhere down the line!