DJX / DOWI - Trading Setup & PlanI have a tight stop loss set at 18600 and I'm expecting to collect profit at the next support level unless it breaks through I would re-analyze.
DOW Industrials (DOWI)
experimentation With Fibonacci lines on DOWIJust experimenting with Fib trend lines to see if there is a way to forecast where stock prices are most likely to hit support and resistance levels. It interesting to note that the 1.618 Extension level around ( 18989.75) has not been reached in the DOWI while it has in other indices like the SPX. Hence i assume that should be the next level of resistance.
Megaphone pattern formed in the DJ TransportsLooks pretty clear to me that with falling Oil prices, and a bounce off the former upward trending support, we have a megaphone formation appearing in the price. This means that we are likely headed for a target of roughly 7000. Possibly beyond that with a negative catalyst. As a leading indicator for the DJ30, DOWI with Dow theory, this signal is extremely negative.
DJX/DOWI - Trading Setup/Plan (Case Study)Here is my trading setup guys, I do expect it to move down to possibly 181 but I will sell my trade for a loss if it breaks the resistance level shown in the chart.
I will update this idea when there's something to show so be sure to check that out.
DJX Correction to 180 - 70% ProbabilityThere is a high probability this coming week that DJX might shoot up to 180.
SELL USDJPY Targeting 100From a technical perspective the USDJPY put in a bearish engulfing pattern on 7/21, which coincided with the channel trend line and major resistance area of 105.5-106.5. Now today we put in a 4 hour bearish pin bar retesting that same area. The retail crowd has also been adding to their longs recently, which now sits 59% long. Just more evidence that we're setting up for a sell off. I'm short with a stop loss above 106.550 and targeting 100.
Be standing at the platform to jump on this train going south.Several Indicators say the price is overbought.
A move below upwards trending line and a move below parabolic SAR at about 18550 could hit a well placed sell stop order.
USOIL short term bounce taking place.A bounce to $46.75 is taking place. Should give the market some boost.
What does it all mean?Remember that AUDJPY SPX correlation that was so strong last year?
It's completely broken down. When the AUDJPY fell in sync with the stock market that usually signified that there was a market move from risky to safe haven assets. Lately, even though the AUDJPY has fallen and stayed flat, the stock market has rebounded strongly and threatens to rise higher.
What does this all mean?
1. SPX is more resilient meaning that it offers the best return. With earnings falling it is creating a bubble where the fundamentals and risks don't match the price. The AUDJPY represents the true level of fear in the market.
2. The AUD and Aussie bonds is less attractive with the RBA dropping rates, political and economic uncertainty. Commodity prices are still low.
3. The stock market isn't as bad as the negative sentiment going around. Market is correctly priced.
4. Short squeezing. Meaning that short sellers are closing their trades or hedging.
5. Bargain hunters. Traders believe that the drops represent profitable opportunities.
It's probably a combination of all these factors, but what I really believe mostly is happening is that foreign buyers, such as those in Asia, specifically China and Japan (who have no faith in their own markets), and European investors where euro stocks are much riskier, are pumping their money into the American stocks. This is creating, certainly imbalances that can only be solved wen Americans start participating in their own markets. When Americans start investing more strongly in their own markets, the Fed will likely raise rates. When they raise rates, there will certainly be a period of volatility but this will just be an era of rebalancing. In any case, I believe that the market must go down before it goes back up.
A Brexit will push the DJIA down 10% at a minimumPlease vote on whether you think the Brexit will happen or not:
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The support as indicated above is extremely important. A break below and it's all over red rover.
Will the DJIA hit the year end target?Investing.com provides average year end forecast of 18050 for the DJIA based on the April poll of 25 analysts. How realistic is this target? The DJIA is currently trading at about 19x trailing earnings while the historical average of 15 is about 20% lower at around 14000 range. The market lows of last August and January of 15500 range was around 16.6 x trailing earnings. Analysed from a valuation perspective the DJIA seems overpriced. Technically the chart appears to be range bound with more downside than upside.
Another perspective is to consider the lower bond yields around the globe. The stock indexes could warrant a higher than average PE ratio. The earnings yield is the inverse of PE or the Earnings to Price ratio. Barrons reports DJIA earnings of $935 which gives us a current earnings yield of 5.29% and the DIA currently yields 2.48%. Both earnings and dividend yield offers a solid premium over the 10 year treasury yield which is currently around 1.61%. The DJIA is estimated to grow earnings over the next 3-5 years at an annual rate of about 7.8%
Whats your thoughts? I look forward to your comments and ideas.
The US30 break down break downSo after yesterday's pullback from the highs, I believe it has a long way to go yet before we see some price stability.
Here are a my reasons.
1. MACD showing crossover.
2. Close below upward trending line.
3. Extremely low volatility which may lead to spike in volatility as price picks up rocks on its roll down.
5. Not oversold.
6. Price bounding off contuously from Moving average Low 50.. A break below this and the price movement will start to pick up pace.
If you are long here, I'd be considering closing positions as brexit worries continue to increase.
$DOWI weekly The weekly MACD could turn over on the Dow as early as next week. Maybe first week of June.
70% Probability Bullish Scenario - DJX / DOWICheck out my site for more details, win and loss ratio on the websites case studies are now 6 - 1.
DJX/DOWI New Strategy CalculationThere is a new calculation in my strategy. Check out the full case study on my website the link is in my profile here.
DJX/DOWI POP EXPECTEDI am expecting a pop in either direction, if it does pop down I don't think it will stay that way for long. You can check out the full case study on my website.
DJX/DOWI POSSIBLE SHORT TERM MOVEMENTAnother free monthly case study on DJX, support at 178 and the target is 181. You are welcome to check out my site for more details on this case study.
The 5th Wave - Coincidence or a message?I'm not one for conspiracy theories but I do always keep an open mind. If one doesn't, you become no different to the next person. Knowledge is power and that's all that matters. The general public will never know 'the plan'.
Have spent hours analyzing this one. Like if you like.
Hope you enjoy my chart.
short term pullback SPYIn 1h chart, SPY is showing some negative divergence here. Price is higher and higher, but momentum is getting lower. Another indicator shows us that SPY is at a super overbought area even though its bullish, a pullback should be necessary. 206-206.50 might be a great target for now.
