2010 - I'm BACK after a brief hiatus!

1,200 Dollar Gold is now imminent!

THE DOW's KEY FIBONACCI NUMBERS

Before you jump on the DOW's Bull Market Bandwagon, you should know where long term fibonacci resistance values are. The Dow is currently at 9,286 - a mere 100 points below the key 38.2% fibonacci value of 9,387. (I used 14,036 and 6,514 as my base calculation values.)

The next key fibonacci value is at 10,275 (50%) and the last hurdle is at 11,163 (61.8%). Any failure at these key points will most likely result in a retest of a low. If 9,387 is not broken, look for a retest of the 6,500 low. If 9,387 is broken, look for the DOW to test 10,275 and so forth and so on. Be careful! The DOW is currently overbought and overvalued and this is confirmed by the RSI and MACD on the chart.

The Dow's short term trend is up, but a major correction is looming. In my opinion, this rally has no legs and is only be driven by a weak dollar. During this rally, the US Dollar started at 89.50 and has dropped down to 78.21 on the USDX. A pretty simple play - Dollar up, Stock Market down. Dollar down, Stock Market up. After a while, it's gets so monotonous that I don't even look at the Dow or S&P500 charts. The only reason why I'm mentioning this is because we have reached a significant number on the US Dollar index. That magic number is 78. If 78 falls, the USDX could free fall to 72 and below which would spell disaster for both the dollar and DOW. Don't worry though. As I sit here and type this mess, the magic hand of the government is ready to defend 78. This should be an epic battle with the government winning and pushing the USDX to 80/81. What happens if they fail......In my opinion, if the dollar goes below 72 on the USDX, this will cause a major decoupling from the Dollar and the stock market. In this case, the Dollar and the Dow would fall together and would ignite a firestorm of selling. Remember, I called for the Dow to go below 5,200 and I'm standing by that call however stupid it looks. The economy is still in shambles. The only way I will change my tune is when unemployment reverses course and I don't see that happening until late 2010. I almost forgot. Here's the numbers for the bloated DOW from the chart. Weak upside resistance is at 9350 and strong upside resistance is at 10,400. Downside resistance is at 8500. For a tighter range, let's check out the Floor Pivot Points for Monday.

3rd - 9,300

2nd - 9,259

1st - 9,215

Pivot - 9,174

Open - 9171

1st - 9,130

2nd - 9,089

3rd - 9,045