spy, question mark for last gap to fillright now we have two gaps here, one in 210 area , another in 211.72. Gaps will be filled eventually, let's see next week.
DOW Industrials (DOWI)
Dow Jones Industrial - Short - Waiting for breakdown below17650DowJones is entering a bearish phase , waiting to break down , A head and shoulders pattern formed , Rising wedge, RSI at support , ADX indicator -ve. We may enter a bearish intermediate down trend. A close below 17650 for two days will confirm this observation
Dow Jones Industrials: Correction in March 2015This week could be the end of the multi-year rally. At least a test of the uptrend is near in the next days. A daily close below 17900 ( pink line ) would be a signal for the downtrend. Otherwise a break of the higher 18330 area ( green line ) would be a signal for a new uptrend.
Long-term key areas are 18130s-18140s as possible resistance zones and 16033-16074 as support area (yearly S1).
P.S. The chart was posted on Thursday, March 5, 2015 after the daily close of 18135.72. Next day the DOWI was down -1.54% (17,856.78) (-278.94)
Short DOWI - 18610/18793 : HS Pattern Forming !!A very strong resistance for DOWI at 18610 and a clear HS pattern forming !! Go short around 18610 and add more at 18793 for targets of 17063 and then a rebound till 18000 !!
Is the Dow Industrials At a major top?Of course no one really knows the answer to that but this chart leads me to believe it is a definite possibility.
We have two very long term support-resistance lines and a third form 1998 that come together now. I counted out my view of EWTs 5 waves up. The 444 and the 44 waves are triangle consolidations as often occurs. Then I was surprised to see that the percent rise from 000 to 333 was almost identical to the rise from 444 to now. We have long term bearish divergences in the RSI on the monthly, weekly and daily charts. We should know in few months if all
of this has any merit. Take care. Have a good week ahead.
Monthly view: Is DOW scare drop on the way?Charts are telling us to be very cautious, as soon as we get the 1st dip in the RED line below zero mark, we shall expect a convincing bounce only to find more panic ahead. ONLY time will tell when we get that scare drop....
Considering where we are today, probability of making significant NEW HIGH is very LOW, however a marginal NEW HIGH cannot be rules out. Wait for the 1st drop and bounce before heavily shorting...
Same thing happened 1965-1985:
Dow falls to 16000This idea is actually the same as I posted early January.
We have reach the starting point of three suggested scenarios (on the date exact btw).
Technically:
- RSI can go much lower, I would like to see it go below 30.
- it's been testing a trendline 3 times since December, time to break
- EMA 100 is broken
Non technically:
- Europe indices are on a high, will Draghi set things in motion?!
- Oil...
- Russia
- some financial institutions in Europe are not OK
If it falls below 17000, we will see 16000! Which means we have a healthy correction of 10%
Yearly Trend line bounce | Open above short term fib (17,317) Here are the things that drove the market down.
Japanese Election 14 Dec
Fed Interest Announcement
Technical indicating markets being overbought
As you can see, the technical are above the below the danger zone of overbought and have just passed the danger zone of oversold (Shorter Term charts like 4 Hours)
Why I believe the market rallying from now (Technical Analysis)
According to the chart, we have first bounced of the yearly trend line (Green arrow) As you can see the trend was breached in October, resulting in another drop of around 700 points, which is why it is such a strong trend.
Secondly we have opened above the short term fib (17,317)
As you can see the trend was breached in October, resulting in another drop of around 700 points, which is why it is such a strong trend.
Why I believe the market rallying from now (Fundamental Analysis)
Japanese Election (14th Dec)
The general election on December 14th cost ¥63 billion (over $500m), and came just two years after the previous one indicating the importance of the event. Abe Japan Ruling Coalition wins majority votes. The 60-year-old premier called the early election to gain a mandate for his economic policies to end deflation, known as Abenomics, after the world’s third-biggest economy slipped into recession. As Deflation is coming to an end, we can expect the yen to rise in value along with other international markets such as the USP500 and UKFTSE100
Federal Reserve Interest Rate announcement
Fed Chair Janet Yellen clarified the central bank’s monetary policy plans, saying it is likely to hold rates near zero at least through the first quarter. As interest rates are held, investors can be confident on their securities till at least around the first quarter of 2015. Along with this announcement, on Saturday evening the Senate mentioned passing a $1.1T spending measure indicating inflating the countries overall cash flow which is good for businesses.
OPEC (Organization of the Petroleum Exporting Countries)
Has announced that it will NOT stop production anytime soon. Allowing the world to benefit from cheaper oil prices. BUT you need to be careful and have your own analysis ready as I wont do this part for you. Critically thinking, US30 has quite a few who rely on rising oil prices so there value will drop, dragging its local index down. However there are companies who will benefit from falling oil companies globally which are in majority compared to Oil dependent companies like Chevron and EXon Mobil. Companies benefiting are the likes of Airlines and Industrial types.
I have my profits set at 1.618 Fib (Red Arrow) and got in at the trend line with a very small risk (First Green arrow)
I recommend tightening your stops as you make your profits.
MERRY CHRISTMAS AND HAPPY NEW YEAR!
Time to LONG DowII had LONG DOWI at 17342 on 18 Dec 2014. My target is 18000 level. The uptrend will be finished in a week time. There are a few technical reasons that I LONG DowI:
1) RSI has already reached the oversold zone 29.43;
2) The right leg of the Stoch RSI double bottom has appeared;
3) A long candle, i.e. 288 points has released a strong buying signal.
I've noted that there are some other authors on this web suggesting people to short DOWI and S&P 500. I have no comment on them but remember: technically, DOWI is still doing well within the triangle.
An InterestingAnalysis of DJ30 with the MACD technical indicatorWe are now in unfamiliar territory.
The MACD technical indicator Moving averages has crossed over above 120 points 22 times since 2003.
Of those, 22 times, 19 of them led to at least a mild pullback within a month.
3 times it moved sideways or down where no money could have been made at all within one month.
The MACD has crossed over 200 points 6 times since the early 90s, it was then followed by a pull back EVERY time within the month. In 2009, the minimum move was 250 point drop but then it went much higher in the following years. The largest pullback was in 2001 when it dropped 2700 points. The average pull back is around 1000 points, but there is a first for everything I suppose. Will it continue to go higher?
As this is a mature market, following years of stimulus and cheap money, my bet is that the market simply doesn't have the fuel to keep going and as the MACD crossover happened at such a high level, I see at the very least around a 300-400 point move down within the month. This presents a very good risk/reward opportunity.
Expect Capital Outflows to Newly Opened Chinese MarketWe're about ready for at least a minor correction from a very unexpected spike up after a pull back in October. Geo political worries will also take its toll on the market. The market is at the top but $74 a barrel of oil tells me that the fundamentals don't support the price.
Topping patternsIt is still too early to confirm that we have topped. For all we know we could be in the greatest bull market that has yet to come. The 1980's to 2000's was a very long stretch of bullish years. that doesnt mean we are going to have a similar situation. The chart aboce illustrates when the MACD 26 close over the 9, the Market has corrected/ crashed and vice versa the market was on a buy signal. we have. According to this thesis we are on a sell signal for the indices, however this signal has failed in the past indicated by the yellow lines( 1980's to 2000's where it kept going higher) and the purple lines. So for a confimred bear market, we need to see the coppock curve close below the 0 horizontal blue line, which usually happen about 6- 12 months from the top. as of now price action is bullish and it is too early to call a top.
SELL S&P500 1871 STOP 1880 TARGET 1840/1830Trading near the channel and the neckline resistance, Short term trend is down and any recovery may face sell offs again. Yes there is short covering or fresh buying seen from lower levels but I feel with smaller stops this trade is worth taking a chance.
Regards,
SP
CapitalTA
Interesting Monthly View on the DOWWhat do you guys think about this trend channel? Is the history repeating itself again?
Short the market until NovLooking for market to complete wave 5 of the elliott wave formation before a rally back to the high or at least close to it. we may have a wave 4 bounce here. but to soon to be buying the dip here
DOWI: The consolidation continueDOWI is still in the consolidation phase. With the end of QE3, and despite the low interest rate, there is no appetite for any risk. The market is taking its profit. There is yet nothing to fuel the market.
The red trend line is the medium term trend line. MArket will decline until FED's decide to increase its interest rate.
Therefore, the next step may very much be the following. Bellow 16045, which is 50% retracement of Fibo, DOWI may seek to reach 15800 as a first goal, before a little correction on the upside for mechanical reason ( by back for the end of the year for companies, oversold level etc) .
Then progrssively we may sleep again until MArch 2014 S3 level, ie 14400 ( 14359) Then we can consider that the consolidation time is over. Bellow 14400, we are in a different scenario, a medium term bearish trend
DOWI: Heading towards 15800 and bellowFor those of who who follow closely my analysis, te shape of DOWI should not be a suprise. I was suprised by 172XX as an all time high because I was expecting 16706 to be the all time high.
Anyway, DOWI is in a consolidation phase towards 14400-14800 which is normal. Bare in mind that the market was fuelled by FED's QE and cheap money, i.e artificially. No FED in pull back from the market step by step.
Therefore, there is a normal correction/consolidation on the downside. It will be progressive and step by step until FED increase its interest rate.
Market has always the last words, i.e no mather which insitution in intervening in the market, the price is at the end of the day made by the market.
Blue print for making money in a crashThis is a simple MACD analysis, to try an forecast a topping pattern before a crash, The safest and high probability trade for a short occurs when the MACD has a negative divergence highlighted in red circle and yellow divergence line. Since it has broken the uptrend support and it is coming back to test it close to the 0.236 fib retracement level. that would be the ideal place to short and capture the crash. Looking at current market conditions, we are still at an uptrend and have yet to form a topping pattern that takes about 1-2 years to form depending on the length of the Bull rally. As of now we are cautiously long however i woudnt be putting new money at these levels as we mat be in the process of forming a topping pattern.
$DJI - Wolfe WaveWolfe Wave - the Elliott Wave for lazy people. Sometimes an extremely effective tool. Around 16400 - we have strong support zone. If the defense will be successful - we go back to the north.
Distribution in progress.
www.investopedia.com
VIX: More and More Volatility to comeWith the end of FED's QE3, market are gaining more and more volatility. This does not mean that market will crash, but there will be more heavy movement, and the swing frequency will be bigger.
FED's QE was inhibiting the market, that is why at the highest level of QE3, VIX was as low as 10... There is also more uncertainties in the market, baring in mind the question of the timing to increase the interest rate in the US, as well as the question of whether ECB will be able to reach its 2% inflation target, the political situation and the impact of commodities.
The real big question is whether the market will be able to sustain a growth without any QE and any FED's assistance although there is still cheap money in the market.
NAturally, VIX as well as R2000 indicator are gaining momentum....
$DJI - No Pasaran! - Descending Broadening WedgeNo Pasaran! - i.e. "They shall not pass!!!!!!" The upper red line opens for the bulls way to the level 18,000. And then what? Another half year rally.
thepatternsite.com
en.wikipedia.org
DOW Weekly, WOLFE and ELLIOTT, both says SHORTIf this is the Elliott 5th wave, and diagonal as it seen, then a long period of bearish trend is just begin.
If it breaks the channel, the lower side of the channel will be seen in a very short time and it will be the first target (wave A)
VIX: Volatility is increasingVolatility is increasing and it is good for swing traders. It is also good to see that the market is coming back to a normal stance, where Central banks are less intervening, or that there intervention is not effective anymore, because at the end of the day, for those who believe like me in liberal economy, you should really do let buyers and sellers fixing the price in a perfect competitive market without having the virtual intervention of the CB's.
Having said that, market is starting to acknowledge QE3 is over, there is still cheap money in the market, but risk is growing. on a medium term basis, VIX will swing with the blue trend line as the lowest level on the downside... The volatility may very much increase when FED's increased its interest rate.
