DOW JONES - The hidden truth in a large complex correction
As a trader, I've always been fascinated by market indexes and the insights they provide. The Dow Jones Industrial Average (DJIA), affectionately known as the "Dow" or "Dow Jones" by some, is undoubtedly one of the most closely watched indexes. It consists of 30 large, publicly traded companies based in the United States, making it a useful barometer for the overall health of the stock market and the US economy.
Throughout 2022, the Dow Jones, like many other indexes, experienced a downward trend. But something remarkable happened in November 2022 – a strong uptrend emerged, breaking the resistance level that had been a formidable barrier in January, April, and August of that year. This shift signaled a potential change in market sentiment, as the index successfully retested the breakout level in March 2023.
Fast forward to today, and we find ourselves up against yet another level of resistance, evident on the chart when we reached 34,100 points just a couple of weeks ago. The big question on everyone's mind is whether the Dow will break through this time. Analyzing the market structure from November 2022 to March 2023, we observe what appears to be a corrective pattern, possibly an ABC or WXY correction. Although I won't delve into the specifics of the subdivisions, it's clear that this correction took several months to play out.
Now, as we approach the 2023 highs, it's crucial to recognize the current market conditions. Despite a prevailing bearish sentiment, the bulls seem to be in control. The bears may need to see a pullback to around 32,800 points to be satisfied – a move that would create a textbook inverted head and shoulders pattern, however this time as a continuation pattern rather than a reversal. Compare to the Apple, Inc idea I shared weeks ago.
If this scenario plays out, the target could be a retest of the all-time high for the DJI index, approximately 37,000 points. This move could catch bears off guard and lead to widespread bullish sentiment, potentially draining the accounts of the bears before the financial crisis catches up with us.
As beginner or intermediate traders, it's essential to stay informed about market trends and patterns. Observing indexes like the DJI can help you make better-informed decisions in your trading journey. While no one can predict the future with certainty, understanding market dynamics and key resistance levels can provide valuable insight into possible market scenarios. Always remember to trade responsibly and consider the risks involved.
Throughout 2022, the Dow Jones, like many other indexes, experienced a downward trend. But something remarkable happened in November 2022 – a strong uptrend emerged, breaking the resistance level that had been a formidable barrier in January, April, and August of that year. This shift signaled a potential change in market sentiment, as the index successfully retested the breakout level in March 2023.
Fast forward to today, and we find ourselves up against yet another level of resistance, evident on the chart when we reached 34,100 points just a couple of weeks ago. The big question on everyone's mind is whether the Dow will break through this time. Analyzing the market structure from November 2022 to March 2023, we observe what appears to be a corrective pattern, possibly an ABC or WXY correction. Although I won't delve into the specifics of the subdivisions, it's clear that this correction took several months to play out.
Now, as we approach the 2023 highs, it's crucial to recognize the current market conditions. Despite a prevailing bearish sentiment, the bulls seem to be in control. The bears may need to see a pullback to around 32,800 points to be satisfied – a move that would create a textbook inverted head and shoulders pattern, however this time as a continuation pattern rather than a reversal. Compare to the Apple, Inc idea I shared weeks ago.
If this scenario plays out, the target could be a retest of the all-time high for the DJI index, approximately 37,000 points. This move could catch bears off guard and lead to widespread bullish sentiment, potentially draining the accounts of the bears before the financial crisis catches up with us.
As beginner or intermediate traders, it's essential to stay informed about market trends and patterns. Observing indexes like the DJI can help you make better-informed decisions in your trading journey. While no one can predict the future with certainty, understanding market dynamics and key resistance levels can provide valuable insight into possible market scenarios. Always remember to trade responsibly and consider the risks involved.
Trade active:
Nothing has changed. No lines were adjusted. Just waiting now...
Trade active:
It's going to be hit or miss from here as we're right at resistance. Only time will tell now.
Comment:
Go ahead and go hit play.... or just check out this screenshot.
