DJIA HIGH P/E READY TO FALL OUT OF BROADENING TOP - SHORT ITThe Dow Jones Industrial Average DJIA is selling for a P/E of 19.3. This is quite high historically. Everyone is buying the hype of lower interest rates boosting stocks. Well, in 2000 and 2007 rates were falling with a falling stock market. Cutting rates is a sign somethings wrong. Anyway, the first rate cut scenario is factored in by now, I don't expect a boom after the cut. Rather it is a situation of buy the rumour, sell the fact. Look at Coke KO, a Dow Industrial. It's earnings and sales have gone nowhere and down over the last 5 years, yet, it's selling for an outrageous P/E of 36. The DJIA and S&P500 are hitting all time highs, a real danger in my opinion. I can see a correction coming, how severe I'm not sure. But, for those adventurous you could short sell the DJIA and S&P500 or SPY. I think a 10% fall is going to happen, possibly more. This will probably happen in sync with the decline in bitcoin and ether. Many assets are overvalued now, cutting rates to prop it all up is not going to work.
The RSI, ROC and stochastic are all measuring overbought. A sign of the decline to come.
Dowjonesindustrialaverageindex
Dow Jones (DJI) Double Top (Strong Incoming Drop Closer)The Dow Jones Industrial Average Index (DJI) is getting closer to a strong drop.
Last time we looked at divergence, the same as with the S&P 500 Index as these charts are almost identical. Today we will be looking at a double top formation plus the same signals we saw on the SPX MACD.
Let's get started... Perhaps you want to hit LIKE now before moving on...
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Dow Jones Industrial Average Index (DJI) Chart Analysis
The double top is marked with yellow circles on the chart above. Double tops are normally followed by a drop. There is also a shooting star candlestick on the second 'top'.
Next, we look at the MACD, here is a screenshot:
MACD Histogram is moving in favor of the bears.
MACD Bearish crossover.
As you can see, these signals, coupled with the bearish divergence we saw in my previous analysis, all point to an upcoming crash.
What's your take on the Dow Jones Industrial Average Index (DJI), will it crash or continue moving up?
Leave your thoughts in the comments section below.
Namaste.