The yellow dotted line shows the support that the current price of DOWT is at ,9501.93 which was the same in Sept 18. It also rebounded nicely. So, this 3rd attempt, can we conclude safely it would do the same as well? Please note that it is also sitting nicely on the 50% FIB level where the rebound is.
Using the inverse pattern on the last frame, one would see that the right handle is in the process of forming. If it does, then the price would goes up. If it does not, it would break down from the support line of 9501.93 and heads towards the 618 FIB level.
The DOW is still with its price action above 21EMA but not for the DOWT which is way below 21EMA but it has happened before and the rebound was evidenced in the chart. If you pull it back to a longer time frame like the weekly chart, it is comforting to note that both DOW and DOWT price action are sitting above 21EMA.
I am confident the peak in the US stock market is not yet in sight and the indices would continue its upward move though there would be pull backs for profit taking and giving buyers an opportunity to accumulate or buy if they like.
I googled and discovered this is termed as the DOW THEORY.
Read more here :
4. Indices must confirm each other. In order for a trend to be established, Dow postulated that indices or market averages must confirm each other. Dow used the two indices he and his partners invented, the Dow Jones Industrial ( DJIA ) and Rail (now Transportation) Averages, on the assumption that if business conditions were in fact healthy – as a rise in the DJIA might suggest – the railroads would be profiting from moving the freight this business activity required. If asset prices were rising but the railroads were suffering, the trend would likely not be sustainable. The converse also applies: if railroads are profiting but the market is in a downturn, there is no clear trend.
Read more: Dow Theory https://www.investopedia.com/terms/d/dow...
2nd day , a bit concerned as it breaks below the yellow line
3rd day , boom, shoot up the yellow line