Rinse and repeat - an updated idea
Updated
Overview
The analysis takes a broader perspective by examining the 5-day chart instead of the 1-day, leading to clearer insights, with wavetrend analysis and On-Balance Volume (OBV) indicating a pattern similar to that observed in November 2021.
Technical Outlook
Short-Term (4-hour Chart)
- Current State: DJI appears overextended and due for a correction.
- Immediate Forecast: Anticipated pullback to the 50 EMA, approximately at the 39.3k level.
Medium-Term Forecast
- Early August: Further decline expected to around 38.3k.
- September: Predicting a sharp increase to an all-time high (ATH) near 41.5k in early to mid-September.
- Post-ATH Movement: A significant drop to the 37.5k region, followed by a recovery phase leading up to the election period, stabilizing around 40k.
Post-Election and Long-Term Forecast
- After Election: Pessimistic outlook with a substantial decrease anticipated, potentially reaching 33.9k by mid-January.
- End of Q1 Rally: A typical rally is expected where stocks may surge until the end of March.
- Mid to End of May: Anticipating a downturn until finding a bottom near this time frame.
Beyond May
- The market's direction is uncertain post-May; however, there is speculation of a recovery influenced by potential rate cuts, which could stimulate buyer interest.
Conclusion
This analysis suggests a cyclical pattern in the DJI with significant fluctuations. Investors should prepare for volatility, especially surrounding key events such as the election and watch for economic indicators like interest rate changes for longer-term market direction cues
The analysis takes a broader perspective by examining the 5-day chart instead of the 1-day, leading to clearer insights, with wavetrend analysis and On-Balance Volume (OBV) indicating a pattern similar to that observed in November 2021.
Technical Outlook
Short-Term (4-hour Chart)
- Current State: DJI appears overextended and due for a correction.
- Immediate Forecast: Anticipated pullback to the 50 EMA, approximately at the 39.3k level.
Medium-Term Forecast
- Early August: Further decline expected to around 38.3k.
- September: Predicting a sharp increase to an all-time high (ATH) near 41.5k in early to mid-September.
- Post-ATH Movement: A significant drop to the 37.5k region, followed by a recovery phase leading up to the election period, stabilizing around 40k.
Post-Election and Long-Term Forecast
- After Election: Pessimistic outlook with a substantial decrease anticipated, potentially reaching 33.9k by mid-January.
- End of Q1 Rally: A typical rally is expected where stocks may surge until the end of March.
- Mid to End of May: Anticipating a downturn until finding a bottom near this time frame.
Beyond May
- The market's direction is uncertain post-May; however, there is speculation of a recovery influenced by potential rate cuts, which could stimulate buyer interest.
Conclusion
This analysis suggests a cyclical pattern in the DJI with significant fluctuations. Investors should prepare for volatility, especially surrounding key events such as the election and watch for economic indicators like interest rate changes for longer-term market direction cues
Comment
First target moved up from 39.3k to 39.5k area as over time moved up the 50 day EMA on the dayComment
First target moved up from 39.5k again to 39.7k area as over time moved up the 50 day EMA on the day. I expect it will stay in this range for a week or two and then a drop down to 38.5k (instead of 38.3k) area as explained in the original commentary. I no longer see a rise back to ATH from here as this is already taking place now. I still think in September we could see another drop down to 37.5k area and then a rise back up to the 40k area until election time. Good luck.Comment
Short-Term Outlook
Based on the current trends and technical analysis, it appears that we are likely to see a decline in the market, potentially reaching the 38,150 level. This downward movement is expected to precede a recovery, with an anticipated rise up to the 39,150 mark.
Mid-Term Projection
Looking ahead into September, there is a strong indication that the market could experience a further drop, possibly down to the 37,500 area. This level is projected to be a significant support point, and it is expected to hold as the bottom for the remainder of the year.
Year-End Expectations
As we approach the end of November, it is forecasted that the market will recover from its earlier lows and could potentially reach around 40,700. This would represent a notable rebound as we close out the year.
Long-Term Forecast for Next Year
The outlook for next year suggests a substantial drop in the markets, which could last until mid to late May. Despite this bearish sentiment, there is an assumption that we might witness some form of rally during January or February, although pinpointing the exact timing is challenging at present.
Please note that these projections are based on current market conditions and are subject to change due to various factors including economic data releases, policy changes, and other market-moving events. Investors should conduct their own research and consider their risk tolerance before making investment decisions.
Comment
Now looking to recover at 37.4k level instead of 37.15k. I can only assume the drop after job data tomorrow morning at open but of course anything can happen. Good luckComment
37.25k is my estimate now. Quite a lot of movement todayComment
Given the jobless claims data I would say this is bottom for now so no more drop IMO ..good luckComment
Back down to 39.1k area then down to 38.7k IMO. Will see if that holds when it gets there IMO. Take careTrade closed manually
closing this idea as it looks like my 1 day idea is playing out nicely...please take a look at it if you are interested...take careTrade active
Keeping this idea open after all as market sentiment has shifted based on the PPI/CPI numbers. Good luck!Comment
As we look at the performance of the Dow Jones Industrial Average (DJI), there's an anticipation that it could continue its rally until exhaustion, predicted around mid-September. It's likely, however, to be followed by a sharp correction, before it potentially rises again into mid-October.
Post that, the future becomes murkier with the potential for a significant market correction or even a crash not being off the table. In light of recent trends, it wouldn't be surprising to see such a downturn.
Could another surge upwards be the alternative? That largely depends on the strength of our economy – a topic currently under some scrutiny. With the U.S. national debt hitting the 35 trillion mark, one may facetiously question, "Is that really significant?" Yet, the weight of this debt is no small matter.
Historically, since World War I, the U.S. government has increased or revised the debt ceiling 78 times to prevent defaulting. This speaks to a pattern of increasing debt as a temporary solution to deeper financial challenges. Arguably, this reflects a culture of greed and short-term solutions which, many believe, will eventually have its repercussions on the economy.
In conclusion, while a new upward wave isn't impossible, it's critical to consider whether our claimed economic strength stands firm against the towering debt and historical tendencies of fiscal management. Good luck!
Comment
DJI Market Projection
Summary
- Pullback Prediction: It is anticipated that the DJI may retract to approximately 39.4k.
- Upward Drive: Following the pullback, an upward trend could persist for around 30 days, leading to a state of exhaustion.
- Potential Unraveling: Post-exhaustion, there's a projection of market unraveling towards the year's end.
Projected Decline
- Magnitude: An estimated 25% drop in the DJI is projected during this period.
- Timing: The significant decline is not expected until post-election.
Market Response to Election
- Presidential Impact: Regardless of the election outcome, market dissatisfaction is expected, potentially triggering a substantial downturn.
- Market Reset: A large drop could serve as a reset for the markets, presenting opportunities for bargains.
Perspective & Disclaimer
- This analysis is speculative and based on personal viewpoints.
- Market predictions are not certain; outcomes may vary from forecasts.
- The rationale is grounded in what appears to be common sense, but market behavior can be unpredictable.
Comment
Comment
update: Comment
I think this is going to be a brutal next few weeks IMO with a 16% drop down to the 34.1k area. Good Luck
Comment
This is going to take a while IMO...forget the next few weeks. The original analysis of this post seems to be progressing on the right timeline. Here is a zoomed in look with some estimates on dates. Good luck.
Comment
Another idea in the form of timing. Of course time will tell. Good Luck
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