Looks like this could potentially bounce. we're at supportThis could create a pennant/wedge that points up or down. if it wedges up then we might lose this support. if it wedges down then maybe we have a chance since it would indicate that the levels below us are supporting nicely which would mean that there will be more momentum going up.
DIA trade ideas
What would a crash look like?The orange lines are all the same, they show the angle of decent in our recent crashes.
The yellow lines are all the same, they show the angle of descent of freefalls during those crashes.
Will the market correction (aka "crash") drop us back to the previous set of trend lines, around the $200 - $220 range?
Would you say I'm crazy if I told you I wouldn't be surprised if it fell all the way to $40?
The 2000 dot-com bubble caused the DJIA index to drop 35%.
The 2000 sub-prime crisis caused the DJIA index to drop 55%.
How much would it drop this time? 65% ?? 75% ?? 85% ??
I extended out the 'crash angle of decent' to see where that'd take us... 2023. WOW!!
What if we look at it another way?
Each crash took us close to the $80 mark in less than a year, before setting a new low sometime after.
I laid out an alternative course with many freefalls landing us around the $80 point a year from the max peak.
The market is influenced by the traders.
Traders are influenced by patterns, therefore the market exhibits patterns.
Will this crash pattern repeat itself? I guess we'll just have to wait and see.
Dow Jones Index is set to bouncePositive closing of the day will increase the divergence between the RSI index and the price. At the moment, the index DJI adds to the Premarket. Closing of the day in with growth will allow to talk about exhaustion of the downward impulse and can precede a substantial reversal in the direction to the growth.
Besides this there are a few things that allow us to remain optimistic about the stock markets, at least for a while. The “Fear Index” VIX has been fluctuating around 20, for over a month now. The new wave of declining markets, instigated on November 09, has not affected the fear of market participants.
The stability of gold prices illustrates the same. Since early October, the gold’s price fluctuations mirror the dynamics of the dollar. Yesterday’s market decline occurred amid the weakening of gold.
The Chinese yuan retains its strength, showing increase since the beginning of the day, which in turn allows us to talk about a partial drawdown of the market, in which some assets have been declining but others have retained their strength.
DIA index is bouncing back from MA and trend line -> BuyHi Traders!
AMEX:DIA index is bouncing back from MA and trend line on the daily chart.
RSI and Stoch RSI are in oversold area.
Price closed above the 200 Moving Average and ascending trend line.
Still on uptrend with recent correction.
=> good long opportunity
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What so much FEAR about LOW VIX readings???Let's be objective here:
Low VIX, or volatility, is not a sign in itself of immediate bear markets. Let's look at the last 10+ years of VIX data to find patterns that would suggest trouble ahead.
What we see instead is that the last two periods of extended LOW VOLATILITY READINGS were during choppy to rising periods of the stock market.
No market runs on just one indicator and VIX is just one tool amongst many.
What I see is going on is that people are selling call options to generate income and to cut back a little bit of risk. This is a sign that people are nervous, not bullish. When people are extremely bullish, they "buy calls" and they "sell puts". But they are selling calls and buying puts, which is the opposite of bearish.
Tim
9:30AM EST January 30, 2017
channelwe can play this channel opening short positions (going with the main trend) and closing when the price
touches the bottom line and also by opening long positions being a bit more riskier. the channel will be invalidated as soon as the price breaks one of the two lines by a close candle not the shadows.