we pointed out that the Dow was fast approaching an exhaustion area as determined by Fibonacci extension levels. On top of this, the RSI was approaching overbought territory above 70. As a result, we issued a warning that “the index does look a little bit stretched to the upside, so it could be hit by some profit-taking early next week.”  That’s exactly what’s happened, as can be seen on the updated chart below. On top of profit-taking, some investors have been selling on concerns that the ongoing conflicts in Iraq could turn into an outright civil war and involve US intervention.