The S&P 500 Index has been a bit hard to read for beginners as the charts are giving bearish signals yet it continued to move up and break above certain strong resistance levels. As for The Dow Jones Industrial Average Index (DJI), this one is telling us a different story, this chart is much easier to read.
When you look at the chart, you can clearly see lower highs being printed, this is marked with blue down arrows.
On top of the lower highs, we also have hidden bearish divergence marked on both the MACD and RSI , which are also in a downtrend.
Both the MACD and RSI are also trending down and getting closer to entering the bearish zone. A strong drop is scheduled to happen soon.
I am looking first at 0.618 Fib. retracement for support followed by 1 Fib or EMA200 (orange line).
Conditions for change: For this analysis to become invalid, the DJI would need to move up, close, and remain above 26951.8, which is its all-time high. This is a very unlikely scenario at this point, but if you are trading this or any other asset, it is always smart to remain open and be prepared for all scenarios.
With that said, I believe the DJI will continue with its bearish tendencies and decline in value in the coming weeks and months... What's your opinion? Share in the comments section below.
Feel free to hit like to show your support.
Thanks a lot for reading.
Namaste.
Comment
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It took one last jump but it is falling now and it seems to be gaining momentum.
"The DJI is now trading below EMA300, the last time this happened it had a further drop of 11.34%, if the same or a similar scenario repeats..."
The whole market is being levitated and moved around now by only one single thing that manipulates all the algos - by the oil price. There are no other relevant factors or technicals left. Huge purchases of oil futures and huge market manipulation to levitate the market through supporting the oil price or otherwise taking profits by pushing crude up and down to where the traders and hedge funds want the market to be throughout the day is all that is happening now.
Note how the whole market moves in unison at the moment, not individual stocks or sectors playing on their own fundamentals or own technicals. No "real" investment money is going into the market (only share buybacks through free money or splurging the profits, or other financial flows swilling around - but no new money from normal investors). You will see gold futures and treasuries (the ultimate back - up storages of value) temporarily dumped to levitate oil which then levitates the market when necessary, then the process reversed when necessary.
It's now more of a casino crossed with a shoot them all computer game controlled by algos trading crude oil, not a stock market anymore.
Hahaha. What a noob. Seriously how much money have you lost. Haha
AlanSantana
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@ChartsOnTime, With this charting what I am doing, is guessing the change of the trend.
The trend changed.
It moved up one last time but then it started falling. I predicted based on the signals coming from the charts that the DJI would fall, not that it won't jump again or that it can't, just that the signals are telling me that it would fall. It is falling.
Namaste.
Ecua_Trader
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@alanmasters, by the time you guessed I was taking profits. lol there you can see who really trades and who doesnt.
Note how the whole market moves in unison at the moment, not individual stocks or sectors playing on their own fundamentals or own technicals. No "real" investment money is going into the market (only share buybacks through free money or splurging the profits, or other financial flows swilling around - but no new money from normal investors). You will see gold futures and treasuries (the ultimate back - up storages of value) temporarily dumped to levitate oil which then levitates the market when necessary, then the process reversed when necessary.
It's now more of a casino crossed with a shoot them all computer game controlled by algos trading crude oil, not a stock market anymore.