MTstiles
Short

Wyckoff Topping Process-DJIA

INDEX:DOWI   DOW Industrials
2155 25 12
Richard Wyckoff developed a psychological model for tracking the emotions that play out during the topping and bottoming processes. This chart shows the labels used by Wyckoff, placed where I believe they are appropriate. The same labels fit the Russell 1000 and S&P 500             , but are less obvious.
As you can see, we should see another bounce higher. If it only partially retraces the "Upthrust" peak, this top will be very near the end. What will follow should be the mark-down phase, which will end with a panic capitulation event. We can then transition to Wyckoff's method for tracking the bottoming process.
Very much like this idea, psychological model to explain market behavior. = common chart pattern
Reply
MTstiles QuantitativeExhaustion
3 years ago
Wyckoff developed it in the 1930's. Good book is "Mastering Market Timing" by Dickson and Knudsen
Reply
QuantitativeExhaustion PRO MTstiles
3 years ago
I do not have that one in my collection, probably should get it.
Reply
Have you done a comparison with Dow Transports? What would you conclude with its chart pattern. Looks nothing like Nasdaq, S&P, DJIA, or Russell. DOWT pattern looks very bullish, which wasn't the case in 2011 before the previous Debt limit fight resulting in a 20% correction.
Reply
Leclaireur QuantitativeExhaustion
3 years ago
Dowt is exactly in the same pattern, only difference is it seems to lag in correction compared to markets. Market financials know something that Dowt doesnt yet.
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
You're the first one to mention a lag. If you show me on a weekly chart I'll believe you.
Reply
Leclaireur QuantitativeExhaustion
3 years ago
Well it lags in breaking support, the markets already did while Dowt did not, one of the two has to be wrong. I decide to believe in a lag rather than some fake support breaking.
snapshot
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
Oh the same trend line broke last week of June, this is not a instant market correction. We will have a decent throwback as MTstiles suggested. Shorts will get squeezed at this point
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
snapshot


Here is a comparison with correlation coefficient
Reply
QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
What I spot from this chart is when the DOWT show steadyness or bullishness (not near 1 correlation) and a Bearish SPX, you have a buying opportunity. Rarely do we get a visa versa, but we did in 2011 with the broadening wedge. When the DOWT broke the descending support, the SPX broke fast.
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
Actually the ascending wedge top (DOWT chart), is a bullish continuation. However, we often see a big bowl or market drop for a rather long period before the uptrend starts again. We probably have one more bump and failure, also known as a throwback, before we go in a bearish trough.
Reply
Leclaireur QuantitativeExhaustion
3 years ago
Then how come the markets ascending wedge top FAILED?
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
The DOWT asending wedge is still in play. You guys yesterday were suggesting a triple top for the DJIA and S&P
Reply
Leclaireur QuantitativeExhaustion
3 years ago
A rising wedge is often a bearish reversal pattern.
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
depends where it is located in the overall chart.
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
Example http://stockcharts.com/help/doku.php%3Fid%3Dchart_school%3Achart_analysis%3Achart_patterns%3Arising_wedge_reversa
Reply
Leclaireur QuantitativeExhaustion
3 years ago
Dowt could break support before the weekend, you know that, right??
Reply
QuantitativeExhaustion PRO Leclaireur
3 years ago
I expect it to break breifly and bounce to near half of the ascending resistant before we totally fall out and make are bearish bowl/cup (S&P 1598) and bullish continuation (1765).
Reply
MTstiles
3 years ago
Thank you for all the comments. I am pleased to see that my submitted chart has provoked a lively conversation.
Reply
andrewunknown MTstiles
3 years ago
Nicely done! Glad to see Wyckoff getting a solid treatment.
Reply
MTstiles andrewunknown
3 years ago
Thank you. I have some proprietary supply and demand breadth indicators that support the above chart. I wish I could have includes in the post.
Reply
finitemonk PRO
3 years ago
Brilliant. Looking at common indices thinking I want to see something looking like an H&S formation but tilted to the major down trend lines. This gives me answers & confidence. Thank you.
Reply
Well did we get a one day throwback?
Reply
TP-I closed all positions.
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
France
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Account and Billing Sign Out