|The questions above are extremely complex, and recent events have shown the extent a major terrorist attack can sway the financial markets. To find an answer, I have applied Gann fans and an Elliot wave count to a daily chart of the Dow. |
|The chart of Dow starts on October 8, 2002 and continues until March 16, 2004. The Gann fan's 1 x 1 angles are at a scale 1 of 10. Notice how closely it follows the trend of the Dow upwards. |
From the high on February 13, 2004, I have drawn a down fan. I have also drawn the division of the range between the low on October 8th and the high on February 13th in tenths rather than the traditional eighths. This is because I believe that with trading in decimals, chart patterns have changed.
|Daily chart of the Dow.|
|Graphic provided by: AdvancedGET.|
|Where the angles cross each other, and cross the horizontals drawn from October 8, 2002 and March 16, 2004, I have drawn in circles that identify future possible cyclical correction points. |
Finally, I have highlighted a possible wave count, which suggests that the Dow could be completing a wave 4 down, and could now start moving into a rising wave 5. This appears to be confirmed as the Dow finds support at 10065, the 20 level of the division of the range, as well as by the RSI indicator, which has given a buy signal.
|To conclude, the chart is suggesting that the Dow could start rising in a fifth wave up. Dates shown on the chart could be corrections, either highs or lows, as the index moves to new highs. A move above 10425 will confirm the up move. |
So, for the short-term, it looks like Al Qaeda is no longer influencing the market and has lost.
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