DIA AT CRITICAL LEVELDIA is at bottom of lower purple trendline and in a resistance zone of past lows
DIA trade ideas
DJIA ETF -DIA -Daily -August Options Expiry Was Today's LowI normally watch only the SPY (SP500 SPDR ETF) for options expiration key levels, but I thought I'd check the DIA and see how it looked and here it is.
Lately too, the volume on the downside since mid-July has swamped the buying days. So, either people are shorting DIA against their portfolios on down days to hedge (like the good old days) or this is just an observation.
You can see now that 169 is a key resistance area just overhead. If we see 169, I'll be selling and looking for 166 and change to cover, then will look for 164.5, then 164.0.
Cheers.
Tim 11:05PM EST 10/2/2014
DIA - monthly chart studyNoticeable divergence. How long and how far can it go? No idea and do not care. However will dump 100% once the pink support line breaks.
****IMMINENT STOCK MARKET CRASH AT HAND??????******STRANGE******I have not one clue about why this market is behaving the way it is right now . . . The exponential moving averages and the simple moving averages on the DIA suggest that the market is very bullish. MOREOVER, if one takes a look at the ADX indicator, the RSI indicator, the Stochastics indicator, and the MACD indicator, all of these indicators suggest a pullback on a Daily chart. HOWEVER, although the indicators suggest a pullback, strangely enough they tell a different story on a weekly chart. MOREOVER, on a weekly chart the indicators display massive divergence in this market that has been building up for SEVERAL MONTHS!! Furthermore, now that the month of October and November are quickly approaching, then perhaps one would need to consider some precaution, for it may be possible that this weekly scale divergence may unfold during the coming months . . .
****IMMINENT STOCK MARKET CRASH AT HAND??????******STRANGE******I have not one clue about why this market is behaving the way it is right now . . . The exponential moving averages and the simple moving averages on the DIA suggest that the market is very bullish. MOREOVER, if one takes a look at the ADX indicator, the RSI indicator, the Stochastics indicator, and the MACD indicator, all of these indicators suggest a pullback on a Daily chart. HOWEVER, although the indicators suggest a pullback, strangely enough they tell a different story on a weekly chart. MOREOVER, on a weekly chart the indicators display massive divergence in this market that has been building up for SEVERAL MONTHS!! Furthermore, now that the month of October and November are quickly approaching, then perhaps one would need to consider some precaution, for it may be possible that this weekly scale divergence may unfold during the coming months . . .
Dow at a high as well ?Is the Dow Jones at a High as well.? As you can see, the Dow has started to retrace from the MTPredictor DP resistance level, which suggests a decline is now coming. The only question is how far. I have added two possible DP support zones on the chart.
$DIA Monthly chart still looks long(BIG TIME FRAME)No reason to think market will crash/capitulate. It MUST distribute 1st, AFTER we break parabolic curve. We should come down a little in coming weeks, but healthy for more upside.
REPUBLISHING Tim West's January 2014 FORECAST FOR DJIAI just find it interesting that so far this forecast is going along pretty close to reality - The market did move down in the first part of the year and it dropped the same magnitude (almost exactly) as forecast. Then the new high occurred and that happened after the correction and to nearly the exact same price as forecast. Now that we are facing the end of the year and the forecast was for a decline into the end of the year... can you believe that this forecast will come true???
Tim 8/16/2014 3:36PM EST Saturday
Here's the text of the forecast for this year 2014, from January:
2014 Forecast:
The market has not built enough time up here to sustain a long term rally. But with more time at lower levels then accumulation can develop and the bull market can continue. However, from current levels the market is not on sturdy ground. The market is stretched up at 165 and support is down at 149 and implies a downside risk of 10%. The time of the last consolidation was 12 weeks and we are in the 12th week of the rally. So, time has run out. Since the market has needed 20 weeks of accumulation before each previous rally, it is bearish to me that it only took 12 weeks in this latest accumulation.
The factors driving the market until now have been clear (stock buybacks, earnings growth, Fed driven low interest rates, equity fund inflows), but we are ahead of rational long term valuations and I would not recommend committing new funds to this market.
I think this year will be at best a sideways to down year as investors still have very few choices on where to invest and stocks will be a focus, primarily because money has flowed into equities and out of bonds and corporations have repurchased stock and issued debt. Corporate leverage is up. Margin buying is at record levels. Investors are optimistic again. Analysts seem unanimous in forecasting higher prices.
This is a great time to do the opposite and walk away.
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The Dow 2007 vs 2014Of course, the projected future waves are pure speculation and I'm not expecting any patterns to repeat themselves exactly. There do exist, however, 7-year and 13-year cycles in the market that deserve consideration and further research, considering the similarities I believe to be showing quite clearly in this comparison. I have made an effort to simplify this by keeping any drawings to a minimum and, by the way, the year 2000 doesn't have the same resemblances. Thanks to Chris Moody for his 2xEMA (20 and 100) Trend Detection script. Do feel free to comment!
DIA - Long term bearish here...Clear divergence trade on monthly may change sentiment until Christmas, i am curious to see how it handles
Dow Jones - On-balance volume strategyI have checked and over checked this strategy a few times, so I hope there won't be too many mistakes. As you will see, this is a very simple and effective strategy, which produces signals when used on its own, without adding any other indicator on the chart or using any fundamental factor. All you need is the OBV indicator, candlesticks and support and resistance. This is how it goes :
1 Look for a divergence on OBV. It shouldn't be a divergence when the price goes flat, it should be a divergence formed on two peaks or troughs. Note that only class A and B divergences have been taken into consideration.
2 After spotting a divergence, wait for a bullish or bearish candlestick like : hammer. shooting star, doji, engulfing, piercing line, dark cloud cover, abandoned baby. Candlestick patterns can be considered too : Evening/morning star, island reversal.
3 Look for the first structure support, that is the start of the current rally or the start of the current correction and set a target above or below it by a few points. On that particular target, position should be closed by <=50%, of the entire position.
4 Before getting to the target, after moving in your favor, the stop should be adjusted to breakeven.
5 The remaining of the original position should be closed when the trader sees fit, or till a contrary signal appears. I have not found a proper closing signal yet.
In the period this strategy was tested, it produced 39 signals. That means 3 signals each year.
4 signals were whipsaws, the red lines.
5 signals broke even (if the stop would have been adjusted to breakeven after the trade moved in your favor)
11 signals went to structure support, and made a rebound.
19 signals went a lot below structure support, with some of them even predicting long lasting corrections.
You can see that I'm using the word support, and not resistance. That is because this strategy doesn't really give long signals, most of them are shorting signals. Out of the 39 signals, 9 were long, 30 were short. Out of the 9 long signals, 6 went through the immediate resistance, 2 made it only to the resistance, and one of them failed.
This is a trading strategy that I'm going to use from now on, separately from my usual trading system. I'll be back with more information.
Dow - correction startedThis market has been really annoying, and hopefully this was the last push up before the correction I've been expecting. There is no demand left in the market, as you can see on my new indicator, the Weis Wave (THANK YOU SO MUCH LazyBear FOR CLONING THIS INDICATOR, I DIDN"T KNOW ABOUT IT UNTIL I SAW YOU PUBLISHED IT). Double bearish divergence on the MACD lines and histogram and we are still in a bearish divergence on the weekly!
Dow Jones Dow Jones, like the S&P, are destined to rise before the long-awaited correction.
Judging by the volume of the past month or so, large bets have been placed on the long side. As for the past trading day, the large volume bar was a pseudo-indecision bar.
I'll be on the sidelines for right now, as I would have entered at the completion of the Gartley that formed.
LeBron James Sides With Bulls, SPDR Dow Jones Industrial AverageBack in 2003, as the US economy was coming out of a recession, the markets were slowly trying to get up off the mat. The tech wreck of 1999-2000 had sent the markets into a tail spin and all the major indexes suffered substantial losses; including America's sweetheart index the Dow, represented here by the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA). So, while most people were looking at improving economic data and low interest rates as the reason for the turnaround, I was looking at the emergence of LeBron James.
Many of you are probably scratching your head and thinking, what is this guy talking about. Well hear me out, as some of the facts are quite interesting. On June 26, 2003, "King James" was drafted by the Cleveland Cavaliers. That day the Dow had a closing print of 9079.04. Over the next few years as James started to hit his stride in the NBA, the markets moved up higher right alongside the basketball phenom. In the 2006-07, LeBron James was playing the best basketball of his career to that point, and lead his Cavs to the final. They eventually lost out to the San Antonio Spurs in four straight games. Then a few months later on October 11, 2007, the markets topped out with the Dow closing at 14015.12. Over the next few years James would continue playing for his hometown Cleveland Cavaliers, but would not reach the finals again, and the markets would not reach those lofty levels during that same period.
In the summer 2010 King James was a free agent and speculation swirled around what team he would choose and on July 8, the much anticipated "DECISION" was announced. The basketball star was taking his 'talents to south beach' to play for the Miami Heat. That day the Dow had a closing price of 10138.99. So from the time LeBron was drafted, to the time he switched teams, the markets had gone up just over 11%, which is a bit uninspiring considering it was over 7 years.
So how did the bulls of SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) feel after the superstar switched teams? Since the day of the historic move to Miami, you could say the markets really began to "HEAT" up. The Dow has blown past the previous high water mark of 14198.10 and gained nearly 70%, and seems to be hitting new record highs on a daily basis. After seeing this interesting correlation between LeBron James and the stock markets, one has to say that it won't be just the basketball world who is awaiting the free agent's decision. While it might be far fetched to say that LeBron has any effect on the markets, it is none the less interesting to note the timing in certain events.
Would you place your market wagers on the direction of Lebrons career? Comment and let me know your thoughts. Either way, as smart traders and investors we know there is always a great trade waiting for us; all we need to do is keep the odds in our favor.
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do i have to republish an idea i just found some improvementr i yes, i wish i could edit an idea i just published. i believe it's a natural human instinct to improve on something i just realised i should have done differently...
A study of long term patterns in the DowThese projections are for comparison purposes only. Every next top has previous ones projected as colourful dotted lines.
Dow - bearish divergences finnaly confirmedI have been posting charts with bearish divergences for the past months, waiting for a correction. If I would go with the flow, I would have made a nice profit, but lack of experience plays its hand. Finnaly, the bearish divergence is confirmed by the downtick of the histogram. Both Force Indexes, which I use independently (each one giving a different perspective) are in a very ugly bearish divergence. The longer term FI, has a double class A bearish divergence, while the small term FI used for precision and small swings, is in a multi peak divergence. The MACD lines post a double class A bearish divergence, while the histogram clearly points out the lack of steam from the bulls. Volume is not working, no idea why, but looked at it last night and seemed very light, but I'll have to look again.
Target for the correction is the second strong support at 16000, which conincides with the value zone of the Dow, and further down the 15500 very strong support level. At 15000 - 15500, I would start getting really bullish. I'm not looking for the end of the bull market, but only for a correction. The only time when we'll know we are in a bear market, is when bears are going to be in full control. Until then, trend is still up, look for longs after a correction.
Daily doesn't give any signal yet, so I'm just waiting for now. If this divergence failes, then I think the market is in gear for at least another 1000 points over the last high.
Dow - Divergence analysis 3Everybody is bullish on the stock market, but are the bulls that strong? An in-depth look with the help of oscillators say no. This is a very annoying market, with daily swings that have no logic whatsoever. This is the fourth false breakout in 2014. This fact rules out the option of getting into a short right now and riding it to 15000 or even 14000. What I am going to do is wait for a daily strong sell signal, like another bearish divergence and a false breakout.
Analyzing the chart, there is a clear uptrend going on, and after a crazy rally, the Dow retraces to the EMA Wave. But where is that crazy rally in 2014?? The price deviation from its EMA is very shallow. The MACD lines continue to be in a massive double bearish divergence, first a class A, then a class B. This is toppy behaviour. The MACD histogram had a very nice run in the beginning of 2013, and a smaller run at the end of 2013. Where is the power of bulls right now? There is no clear downtick to confirm the divergence, but by the time there will be one, it is going to be too late to jump in, as this is a weekly chart, and we are still in an uptrend. The point is we need to anticipate. Think about it ; in order for the Dow (and it's the same picture as in Germany, Spain, Australia, France)
to clear this bearish divergence, it would have to rally to about 20000 ( this is just an aproximation, theres no way of telling). Now, how likely is the Dow to rally to 20000 till the end of the year or the start of 2015, compared to correcting to 14000 - 15000 in the next few months, and clearing up this ugly bearish divergence?
Now the Force Index. First the longer term FI, coloured in blue and circled in green. Look at that huge class B bearish divergence. Why would you buy this?? Yes sure, I may be wrong, and the Dow might rally 1000 points this week, but why would you buy this? The second FI, coloured in red, is used for entries and finding short term weakness or strength, that is how its creator, Dr. Elder uses it. The bearish divergence is going on for months, and Dr. Elder said once that what he really likes is 4 peaks on the 2 day FI, each one lower than the other with price standing higher at each peak. Here, the price is not standing higher, but we have 5 lower peaks on the FI. This is extremely bearish.
The daily chart stands at a buy zone, and on Friday the momentum from Thursday was lost. I don't want to enter right now, I want to go in a bit higher. I will wait for a serious signal, as I got whipsawed a few times by this false breakouts.
A little perspective for all the eager bearsNo fancy indicators here. Just good ol' fashioned highs and lows.
Could a top be developing? Sure, but why risk short positions now, when there's no evidence of a trend change?
