Dow 30 Beneath Fibonacci

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It may sound ironic (or even masochistic), but I'm actually more optimistic than ever about the prospect of a resumed tumble in the market. I lost money today, but only about half what I made yesterday, so over the past two days, I'm still in good shape. I also managed to preserve some profits by exiting my SRS position earlier today, since it seemed uncharacteristically weak. I trimmed my FAZ position in half, since the strength in the financials is holding up better than I imagined.

I noticed that for both the $INDU and the $TRAN, today's high price butted right up against the underside of a major Fibonacci retracement level. This retracement series spans 1974 to 2007, so it's definitely the biggie, and it's acting just like it did around January 6th of this year when it peaked. Here's the $INDU:

The 800 level on the S&P is within spitting distance. If we charge right past it, well, I guess maybe the countertrend rally we've all been waiting for is really here. If we get a meaningful failure around that level, I think we could ride the S&P back to the 730 target.