DJIA Dow Jones in huge symm triangle - ready for massive move
The DJIA (Dow Jones Industrial Average) is in a huge symmetrical triangle and is poised for a massive move either up or down. There is no more space within the triangle to remain undecided about the direction of the move.
Both the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are near the centerline, confirming that we are ready for a move. However, everyone is wondering which direction it will be.
In my humble opinion, based on chart analysis and the current economic disaster we are facing, the move is highly likely to be to the downside. Although a symmetrical triangle is typically a continuation pattern and a breakout above the upper line suggests a long position should be taken, it can also be traded to the downside.
Why do I think it will break down, even though the chances are 50-50? Well, in my extended analysis, I also consider the Dow Jones Transportation Average (DJTA). There is no chance for the DJIA to move up in a future bull market without involvement from the DJTA. If you examine the chart of DJTA, it is also in a symmetrical triangle but is struggling to move from the lower trendline. A healthy move within a triangle would involve bouncing between the upper and lower lines, rather than remaining on one for an extended period. In this case, DJTA is sitting on the lower line and cannot move. Furthermore, DJTA hasn't shown much movement in the last four months, or rather, it has been declining while the market is being propped up by the AI hype.
Therefore, I give a 70% chance for both DJIA and DJTA to drop down from their symmetrical triangles and begin a several-month decline. I will change my opinion only if DJIA and DJTA break the upper line on high volume and close above it. Otherwise, the market will experience a significant and rapid decline.
Both the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are near the centerline, confirming that we are ready for a move. However, everyone is wondering which direction it will be.
In my humble opinion, based on chart analysis and the current economic disaster we are facing, the move is highly likely to be to the downside. Although a symmetrical triangle is typically a continuation pattern and a breakout above the upper line suggests a long position should be taken, it can also be traded to the downside.
Why do I think it will break down, even though the chances are 50-50? Well, in my extended analysis, I also consider the Dow Jones Transportation Average (DJTA). There is no chance for the DJIA to move up in a future bull market without involvement from the DJTA. If you examine the chart of DJTA, it is also in a symmetrical triangle but is struggling to move from the lower trendline. A healthy move within a triangle would involve bouncing between the upper and lower lines, rather than remaining on one for an extended period. In this case, DJTA is sitting on the lower line and cannot move. Furthermore, DJTA hasn't shown much movement in the last four months, or rather, it has been declining while the market is being propped up by the AI hype.
Therefore, I give a 70% chance for both DJIA and DJTA to drop down from their symmetrical triangles and begin a several-month decline. I will change my opinion only if DJIA and DJTA break the upper line on high volume and close above it. Otherwise, the market will experience a significant and rapid decline.
Comment:
Consistency is the key of success....