The Dow Jones Industrial Futures contract has been in an extensive rally since Feb 6th 2009 with several major corrections along the way. These corrections have given the markets more stability in the move up with more willing buyers and less willing sellers. As of today July 18th 2013 we continue to form new structure highs which leads the mass majority of the public to believe there is nowhere to go but up. That could not be further from the truth, in fact the most basic part of our trading is to know when to stop buying and start selling or vise versa. To do this we must know how to anticipate upcoming directional price moves (projections) on all markets including the dow jones futures.
Click images below for the following details:
(Image 1) On Nov 21st 2008 the YM formed a structure low followed by a retracement of 161.8% on Mar 6th 2009 which became the lowest low since the 09 rally began. From the low of 09 price formed an original level of demand at 6498 and continued to rally after a retracement into this level. On June 5th 2009 price put in a swing high and retraced forming the first major correction. From the low of Mar 6th to the high of June 5th, was then duplicated putting price above 9812. At this time the talking heads were discussing the reversal which had already happened!
(Image 2) Instead of getting into a trade after the fact, let's look at how to anticipate the upcoming directional price moves (projections) with Fibonacci Sequencing to take part in the profits. We will start by looking at the facts: we are putting in all time highs after multiple major corrections and since June 24 2013 we have had a vertical move up with no major corrections. With the current move being up we can use historical data to determine where price is most likely to stop or reverse. Due to all time highs we must revert to our Fibonacci Sequencing to anticipate upcoming targets and reversals. We are looking for a retracement of 127% or 161.8% followed by a potential reversal with our projected T1 and T2. View the images below for our projected reversals and targets. The signs for the Dow Jones futures can be compared to the lows of 09 which will show how history can repeat itself.