Uncertainty in the market is evident in the Dow. RSI has steadily declined while we nearly made new highs back in April. Moreover, the 50 day moving average (not shown to make the chart a little easier to see) has all but crossed the 100 day and is taking aim at the 200 day moving average. The chart pattern resembles a head and shoulders pattern, and the RSI's lower highs strengthen this argument. Trade wars, tariffs, Trump's twitter account, and Fed uncertainty make a short very reasonable. I've a few chart indicators that justify my reasoning. -RSI's lower highs -Converging moving averages -Possible H&S pattern -DJI has been over-extended for some time and recently broke the blue trend line (again) and may retrace back to previous trend (orange lines) -Fib retracement lines have been proven resistance points since January 2018. If DJI breaks the 23.6% retracement, I'd be looking at 38.2% and 50% next. -Recent bounce was a gap filler, of news that never happened (Mexico tariff deal and China negotiations).
Feel free to check out some of my other ideas. I'm looking to provide TA on a weekly basis going forward and would love feedback.
So... I was just about to go to sleep and I was thinking about the DJI and this chart you posted. And all I kept thinking was he is right! He is right! And then I had to get up to look at your chart again at 2 in the morning!!
Anyway, long story short. You are right, the market is going to go down to 21700, then bounce back up (not sure by how much) and then it will go back down.
But I think, it will hit 21700 within a shorter time period. I would have to go check my chart.
Nice work!!! Thanks for posting this.
Princessgirl
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@myfye13 , yah I think it will hit 21700 at the end of July and then bounce back up again after that. I know you are thinking in waves, but I am looking at it from a head and shoulders pattern like the H & S pattern that finished in the end of Dec. Again, thanks for posting this!!!
Princessgirl
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I kinda of agree with your chart, except with the last wave into 2020. I don't think it will be that steep on the last wave. But looking at my calculations, I guess we are supposed to hit the 17,000 or 16,000 mark by May/June. I guess the wave looks steep but it is correct.
Princessgirl
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@myfye13 I was looking at your chart again. And I do believe you are EXACTLY right with the times frames and the price points!!! Thanks for the post!!!
TradingShot
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No catalysts to suggest such a violent crash. If anything we should be moving higher on this bullish break out confirmation.
myfye13
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@TradingShot, thanks for the feedback, always appreciate it, especially from someone as experienced as yourself. My chart was looking LT, with the real decline not happening until 2020. And I would argue that there are many catalysts for a fall. Currently in the 38th quarter of economic expansion (4 years longer than average), possible trade-war China, the overly-reported inverted yield curve, 2020 election (socialist America? WTF?) and on top of that the Fed reducing interest rates just under all time highs (!!??), etc. The Fed really blew me away. If we drop interest rates now, we have very little ammo for future economic stimulation.
What do you think and what are the catalysts for moving up to test all-time highs?
Again, really appreciate your feedback!
omtrader
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Please update the idea it good and we rejected today from your blue upward lower sloping trend channel line
Anyway, long story short. You are right, the market is going to go down to 21700, then bounce back up (not sure by how much) and then it will go back down.
But I think, it will hit 21700 within a shorter time period. I would have to go check my chart.
Nice work!!! Thanks for posting this.