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Although the call was perhaps a week too early, the Dow is only down 55 points over the subsequent two-week period. Despite evidence of increased intraday volatility, the long recommendation remains firmly intact.
Friday's jobs figure was the perfect number to trigger a return of investor confidence. The 'goldilocks' scenario calls for employment growth (confirming an ever improving US economy) but not sufficiently 'hot' to force the Federal Reserve into an abrupt end to its quantitative easing (QE) stimulus programme. The jobs number confirms there is enough QE left in the tank to carry the Dow to my next target band (defined as 16,023-16,186).
The past couple of weeks' unwinding of short-term excess has taken the Dow down by a typical Gann-theory 4.165%, creating an intraday low of 14,844 in the process. A deeper pullback to my old target at 14,545 would have been the perfect scenario, offering a much lower-risk buying opportunity, but I am now working on the basis that 14,844 will hold firm. Indeed, projecting an 8.33% advance from this minor low adds yet another line to within my target band 16,023-16,186.
Recommendation: Buy or stay long. Target 16,175. Stop-losses can remain unchanged and applied only on momentum beneath 14,390.