The Over-inflated Dow Jones Industrial Average
Before I share my commentary on the technicals, I would like to point out that I do have a fundamental bias underlying my view of things: The more I have educated myself on US history, monetary policy, and consumer behavior, the stronger my conviction has become that the US has continually kicked the can down the road surrounding an extremely large bubble it has created. I won't digress but could go on for awhile here!!! I'll leave it at this, nothing backs the dollar besides greedy people in office (print! print! print!), and most people love to live the "American Dream" by mirroring what the government does by OVER-spending and UNDER-saving (DEBT).
I have been saying for a long time that the DJI looks extremely over-inflated and we are due for a major correction.
If you look back in time, 30%, 40%, 50% corrections are not unheard of.
In 2008/2009 we had over a 50% correction. My view is that the next correction has the potential to be as/more significant.
I do not know when, and I do not know how severe the next correction will be (no one does).
However, what I have created here is an educated guess of where things could go. Pay less attention to timing and more attention to price levels.
I feel it is very possible to see a correction down to the red box highlighted below. This represents 3 key areas, and would represent a 49%-55% correction depending on the level it hit in this box and assuming we have already topped in the DJI. 3 Key Areas are:
(1) .618 Fib level
(2) $14K level - historical area of major resistance & support
(3) .702 Fib level
It is also very note-worthy that a local top has been reached, and the government continues to artificially inflate the market. This is evident IMO by the negative divergences within our indicators below; MACD, RSI.
Lastly, for those familiar with Elliott Wave Analysis, I have tentatively drawn a 5 wave w/ABC correction taking place.
Lastly, Lastly :) : Bitcoin was created from the last irresponsible financial crisis in 2008/2009. People were fed up with all of the shady things taking place atop.
I have been saying for a long time that the DJI looks extremely over-inflated and we are due for a major correction.
If you look back in time, 30%, 40%, 50% corrections are not unheard of.
In 2008/2009 we had over a 50% correction. My view is that the next correction has the potential to be as/more significant.
I do not know when, and I do not know how severe the next correction will be (no one does).
However, what I have created here is an educated guess of where things could go. Pay less attention to timing and more attention to price levels.
I feel it is very possible to see a correction down to the red box highlighted below. This represents 3 key areas, and would represent a 49%-55% correction depending on the level it hit in this box and assuming we have already topped in the DJI. 3 Key Areas are:
(1) .618 Fib level
(2) $14K level - historical area of major resistance & support
(3) .702 Fib level
It is also very note-worthy that a local top has been reached, and the government continues to artificially inflate the market. This is evident IMO by the negative divergences within our indicators below; MACD, RSI.
Lastly, for those familiar with Elliott Wave Analysis, I have tentatively drawn a 5 wave w/ABC correction taking place.
Lastly, Lastly :) : Bitcoin was created from the last irresponsible financial crisis in 2008/2009. People were fed up with all of the shady things taking place atop.
(1of2) My initial analysis (no timeframes) says the following about the $DJI #DowJones #DowJonesIndustrialAverage #DJIA:
A Wave takes us to $22.5-$24K
B Wave (which everyone euphorically will buy into) takes us as high as $27K
So we'll bounce in-between $22.5K - $27K
Then (2of2) comes the dreaded C Wave. This is where we bottom.
This C Wave will take us to ultimate lows between $13.3K-$15.3K
Stay safe out there over investing #recession
Check out my chart!