The near term risk for the Dow is on the downside, says Adam Hewison of INO.com. In this free video, he describes the recent bounce as a classic Fibonacci retracement, where markets typically retrace 50-62% of their recent losses, before retesting new lows.
Regular readers know that traditionally, I have not been a big believer in heavy forms of technical analysis. However about a year ago, I adopted a simple entry and exit system based on basic technical cues after reading Winner Take All, by William Gallacher (which I'd highly recommend, by the way).
And I have to admit, I'm very grateful I did, because otherwise I would have been completely wiped out in the commodity crash that has taken place this year.
What is your experience with technical analysis? Do you view it as a critical component of your trading? I'd love to hear your thoughts in the comment section below.