29 Sep DOW Breakout Backtest Number 2 !!
Following on from Yesterdays intraday analysis of the DOW price backtest of the original break-out, the long position turned out to be spot on for a 280 point rally.
Tonight we saw a 2nd opportunity of exactly the same set-up. I entered long at 10,969 with a tiny 25 point stop loss, and the rally that followed gave almost 200 points in just one hour of trading. I have closed this position now simply because 100 or more points can be wiped off your profit in no with the current volatility, but I am now thinking that tonights low might stick for a while.
Another visit to this trend line and I’m doubtful that it could withstand a 3rd test without price breaking down.
Also worth pointing out that the back test occurred at precisely the 50% Fibonacci level from the 23rd September low to the 29th September high. Also visually, we may have a bullish cup and handle formation developing right here.
Here’s tonight’s chart: