Here's a simple weekly chart of the DIA using a 5-day chart. 5-Day charts use consecutive 5-day time windows to form the bars and is not a "weekly" chart because it isn't plotting Mon-Fri action as one bar. It's a clever way to group 5-days together for graphing.
The rally up from the 6-week base has now extended 6 weeks and time has expired. The rally has failed to reach the upside target (see white arrows at top of chart) and given that we have had contracting ranges for the last two 5-day time windows which suggests loss of momentum, we can look for sell signals to trigger. We are also rallying into the "High Volume Resistance" on the chart (see labeling on histogram of volume on the right side of the chart).
The bullish points were from before where there was a 6-week range from which a "range expansion rally started from" and then "confirmed by rallying the same distance again within 3 bars", but now the bullish factors are behind the market and it is back to the "prove it" stage once again.
There is one "range expansion from 2 weeks ago that will fail if we don't rally 6.20 points from the 177.68 level. So, we need to reach 183.88 to prove the range expansion from October 22 (week #4 of 6 week rally).
Good fortune to you.
Questions: Please PM me or ask in the "Key Hidden Levels Chat Room" where myself or Ivan Labrie can answer.
Tim
Comments
Victor.Y.F
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Thank you Tim, nice chart again! Good fortune to you too!
timwest
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Updated chart ----
IvanLabrie
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Looks great.
IvanLabrie
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Great, I had a similar chart but using 3 days.
Same message overall, looks like short the market time today.