Do charts have memories? Could a confluence of support and resistance lines dating back as much as 90 years end up being important to today's Dow? And what might happen if the Dow were to break above this rare line up?
Some key "emotipoints" (emotional turning points) dating as far back as the 1920's, line up at one price zone, which comes into play around Dow 16,000. As of last nights close, the Dow is less than 500 points -- less than 3% away -- from this confluence of emotipoints.
The Dow: Inflation Adjusted
This confluence becomes all the more important when you look at the chart above (globalfinancialdata.com
), which reflects that the Dow hasn't made any gains after subtracting for inflation in 13-years! (see post here).Take It As Resistance
Odds are high we won't know for a while how the Dow will handle this rare situation. At this time the confluence should be viewed as resistance.
If the Dow can break through this cluster of lines, it would be a very positive technical event!