This is mostly for fun, but also an illustration of a worst case scenario. Saw this crazy fractal and thought....what if? I love the fact that this chart has so much price history.
In all seriousness though, if the DJI fails to consolidate in this range and make a higher high soon, we can assume it will drop. We have a nice double top formation so far. Buying here is risky, but could have a high reward if you can time the next top (if there is one), because after that, it could get very ugly.
If we drop hard now, we have immediate support in the 15000 area, and then around 10000. Based on this log graph, we have A LOT of room to fall in the event of a crisis. If those supports mentioned above and outlined on my chart fail to hold, we could fall straight down to the support created by the 2008 recession (my yellow line). That happens to coincide nicely with the long term uptrend line that dates all the way back to the Great Depression. If we fall below that, all bets are off.
If we move higher from here, I expect a final blow off top (this is also what happened right before the Great Depression). The Great Depression fractal (circled in red) looks very ominous. You may have to scroll to the left to see it.
This is not financial advice, nor am I a qualified financial advisor. This is just my perspective on how things COULD play out from here, and I'm mostly just curious to see how it plays out. I do not have any open positions here at this time.
In all seriousness though, if the DJI fails to consolidate in this range and make a higher high soon, we can assume it will drop. We have a nice double top formation so far. Buying here is risky, but could have a high reward if you can time the next top (if there is one), because after that, it could get very ugly.
If we drop hard now, we have immediate support in the 15000 area, and then around 10000. Based on this log graph, we have A LOT of room to fall in the event of a crisis. If those supports mentioned above and outlined on my chart fail to hold, we could fall straight down to the support created by the 2008 recession (my yellow line). That happens to coincide nicely with the long term uptrend line that dates all the way back to the Great Depression. If we fall below that, all bets are off.
If we move higher from here, I expect a final blow off top (this is also what happened right before the Great Depression). The Great Depression fractal (circled in red) looks very ominous. You may have to scroll to the left to see it.
This is not financial advice, nor am I a qualified financial advisor. This is just my perspective on how things COULD play out from here, and I'm mostly just curious to see how it plays out. I do not have any open positions here at this time.
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Another possible support line that I didn't see before, which would indicate a less drastic scenario. This purple line was resistance for 80 years until it was finally breached in 1995. We could revisit it as support, just like we did in 2008. This would indicate a bottom around 13000 (red "X"), which is still a 50% decline from here. Could also reach this target after a blow off top to around 32000 (maximum height of the log trend range at this time, marked with the green "X").
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Better view:
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Price can go up to around 26660 for a triple top, before finally completing the bubble. Of course, we could consolidate here for a while and push a little bit higher, but the r/r clearly favors the sellers at this point.
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"Sustainable Growth." Should at least target the 15000 mild support area sooner or later.
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bad sign that we weren't even to get to the top resistance of this channel, which is why we broke down. This has a good chance to be the beginning of the real drop, which has an immediate target in the 23500 area, then 18000, then just below 15500. Shorts are likely to pile on once 23400-23500 is breached, and then it'll be free fall.
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The U.S. dollar is also beginning its descent:
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Crypto has been truly massacred, and this is a good canary in the coal mine for what is probably about to hit the stock market. It's possible that some money goes into Bitcoin at today's low price in order to hedge, or it'll continue its massive selloff. Remains to be seen at this point.
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This really has a high probability of making the "real" drop soon. As soon as that 24000 level falls (red dotted line)...pretty much any hour now, some big sellers will probably step in. It may delay until Cyber Monday though. Really struggling to stay above 24300 today. Once 24000 falls, 23300 will most likely immediately follow. From there, selling should accelerate because it will signal the true start of a bearish reversal. The next supports are in green on my chart, but as I've said, the 18000 area is really the next "big" support area. The others are pretty minor.
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We could also have another attempt to push back past 25000. Watch for selling in that area too.
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Looks like we pushed past 25000 again, but have been unable to sustain this rally very well. Not looking super good. People sold on that bounce pretty quickly, as I expected. Watch for a potential bigger selloff to end the week.
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VERY close to the danger zone here, below 24000. Watch out for short opening up if we break below. Could get very nasty indeed! If we get some continued buying here, we could potentially end this consolidation and push up a bit higher for a final wave up...however the continued selling at resistance says otherwise. I will only flip mid-term bullish on the stock market if we can somehow rally above 26000. My bias right now is towards a major breakdown below 24000 though. Let's see what happens. Today is important!
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Aaaaand 24000 broke. The speed of the drop hasn't quite accelerated yet, but that likely won't happen anyway until the green support is broken. We obviously need to bounce back quickly to avoid heading down to AT LEAST the pink yearly support around 23550. Below that is 23000, and below THAT is major short territory.
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A failure to get back above that dotted red line would be really bad. We must wait to see what happens during the rest of the day. Currently trying to get back to 24000. Failure there would indicate that more selling momentum is to follow.
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Currently struggling to rally back above the red support.
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Making a good rebound attempt now. If 24000 continues to hold, we might consolidate and make a new push up soon. Confirmation below and we go into severe short territory. Let's see how the daily candle closes.
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Looks like we're seeing a bullish divergence play out, which is why we've seen price bounce so well since yesterday's low. This could provide enough fuel to test even 26000 mid-term, but I would still be cautious. The volatility is probably fun for traders, anyway.
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That bounce failed to hit even 25000 so we might be attempting another breakdown of 24000 today.
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Looks like our first "real" drop of this recession is happening. This is what I initially expected after the 24000 broke, but we had a small relief bounce (likely for some whales to exit their positions). Now the market will likely be in free fall. The nearest supports lie in green on my chart (20000-21500 first). We should ultimately head down to at least the 18300 area though. That would be a good bearish target, and then we can gauge market strength by seeing how strong the bounce is. If that doesn't hold, 15000 is next.
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I think an eventual bottom for this bear market will be either the 13000 area or the high 6's/low 7's. This is based on the above analysis and long term log trend lines that extend for many decades.
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New Analysis:
