Dow Jones - Up 50% in 21 months-How Long Can this keep going On?
Dow Jones Industrials Index: DOWI (End of Day) Short Term and Medium term Outlook
At least the markets get the President even if no else seems
to. It's quite impressive that people's pensions are worth 50%
more than 2 years ago in many cases.
How long can it go on?
We can see that the Dow is pushing up against the upper
limits of the two parallels that have controlled this great
impulse wave from the outset. A 50% rise is a natural check-
point, as will be 100% when we get there.
We can also see that each time it tests the upper parallel it
begins to unwind, creating a continuation pattern with a
sideways or downward bias that lasts 2 months or so.
It's already lost the power of the smallest parallels and has
since tracked sideways off the first support at 23237, almost
precisely with the actual low some 7 points higher.
So in the near to medium term it's likely that the Dow will
track down the small parallels shown at the top of the chart,
becoming a perfect environment for day-traders that 'get' the
pattern here...sell off the upper parallel buy back on lower
until one day the the upper parallel is broken to upside (or
downside) and follow that break. But it's more likely to zig-
zag down within the small parallels to fill the gap at 22995
and then bounce powerfully from there. That's a nice little
flag to trade between in the meantime.
So at moment it looks like a lazy continuation pattern back to 22393 before a good rally. This pattern will
change on any successful breach of either of the small parallels - to upside follow on successul break of upper
parallel for another test of the larger parallel above.And if the lower small lower parallel is sucessfully breached
on the downside it will seek support off the blue support line at 22995 - just much quicker than if it tracks within the flag.
The 22995 level is important to the medium term for the Dow.
And we can see that the entire rally between the two blue
supports at 22995 and 22393 is, so far, uncontested. It would
be easy pickings for the bears should 22995 fail at any point.
It would fall quickly 600 points (a fabulous short if we see it
at any point, worth setting an alert for) to 22393 at least and
quite likely to test the lower large parallel before the next
rally could begin in earnest.
But until we see a break of those small parallels that form the
flag top, this space belongs to day-traders.
One other thing, this market is one of the best to trade, making conventional patterns, especially in continuation mode - making it muuch easier to 'read' than, say Nasdaq. Look atthe patterns - they're friendly, familiar. Are Nasdaq's? Find a friend you can trust. That would be the Dow.
Long term, for what it's worth, this index should rally at least 4 X from the February 2106 low and quite easily 6 times. America has never had it so good since Ronald Reagan rode into the sunset. Happy thanksgiving to the USA. Long Term Cycle Analysis:
At least the markets get the President even if no else seems
to. It's quite impressive that people's pensions are worth 50%
more than 2 years ago in many cases.
How long can it go on?
We can see that the Dow is pushing up against the upper
limits of the two parallels that have controlled this great
impulse wave from the outset. A 50% rise is a natural check-
point, as will be 100% when we get there.
We can also see that each time it tests the upper parallel it
begins to unwind, creating a continuation pattern with a
sideways or downward bias that lasts 2 months or so.
It's already lost the power of the smallest parallels and has
since tracked sideways off the first support at 23237, almost
precisely with the actual low some 7 points higher.
So in the near to medium term it's likely that the Dow will
track down the small parallels shown at the top of the chart,
becoming a perfect environment for day-traders that 'get' the
pattern here...sell off the upper parallel buy back on lower
until one day the the upper parallel is broken to upside (or
downside) and follow that break. But it's more likely to zig-
zag down within the small parallels to fill the gap at 22995
and then bounce powerfully from there. That's a nice little
flag to trade between in the meantime.
So at moment it looks like a lazy continuation pattern back to 22393 before a good rally. This pattern will
change on any successful breach of either of the small parallels - to upside follow on successul break of upper
parallel for another test of the larger parallel above.And if the lower small lower parallel is sucessfully breached
on the downside it will seek support off the blue support line at 22995 - just much quicker than if it tracks within the flag.
The 22995 level is important to the medium term for the Dow.
And we can see that the entire rally between the two blue
supports at 22995 and 22393 is, so far, uncontested. It would
be easy pickings for the bears should 22995 fail at any point.
It would fall quickly 600 points (a fabulous short if we see it
at any point, worth setting an alert for) to 22393 at least and
quite likely to test the lower large parallel before the next
rally could begin in earnest.
But until we see a break of those small parallels that form the
flag top, this space belongs to day-traders.
One other thing, this market is one of the best to trade, making conventional patterns, especially in continuation mode - making it muuch easier to 'read' than, say Nasdaq. Look atthe patterns - they're friendly, familiar. Are Nasdaq's? Find a friend you can trust. That would be the Dow.
Long term, for what it's worth, this index should rally at least 4 X from the February 2106 low and quite easily 6 times. America has never had it so good since Ronald Reagan rode into the sunset. Happy thanksgiving to the USA. Long Term Cycle Analysis:
