The modest rally on Friday achieved an almost exact 0.618 Fibonacci retracement of the Dow’s 2981-point decline from 18351, the all-time high recorded in May. The intraday peak hit 17220, eight points above the precise 0.618 mark at 17212. The overshoot is not technically significant as yet but would become so if the Indoos make further headway on Monday. They were on track when the week ended to hit 17295, a Hidden Pivot target 80 points above Friday’s close that can be found on the 30-minute chart, where A=16765 on 10/7. A ‘mechanical’ buy may eventually be possible following a decisive push past 17193, the secondary pivot, but you should attempt this only if you thoroughly understand the simple rules governing ‘mechanical’ trades. Otherwise, if the opportunity should develop, stay tuned to the chat room for guidance in real time. _______ UPDATE (7:29 p.m. ET): No change. The Dow edged higher on a day marked by asphyxiating tedium, hitting a 17235 high that exceeded Friday’s by a marginal 15 points. _______ UPDATE (October 20, 6:43 p.m.): With Tuesday’s thrust to 17265, the Dow has now traded 53 points above a 0.618 retracement, implying the Fibo resistance has been compromised. Strictly speaking, a pullback to p2=17193.53 would be a ‘mechanical’ buy, stop 17158.99. In practice, however, I’ll recommend a ‘camouflage’ entry if a set-up takes shape following a print down to 17193.53. The target would be 17295.48 (see inset, a fresh chart)._______ UPDATE (October 22, 11:07 a.m.): This morning’s vicious short squeeze, triggered by utterly meaningless remarks from Draghi, has easily surpassed 17295. Slide backward to create a new point A low at 16943, adjust B-C higher by one click, and the new target is…17524. In this case, p=17338 has already been decisively exceeded, implying minimum upside over the near term to p2=17432.
