DOW JONES could enter an accumulation cylinder if the MA50 holds

Everything went according to plan since my last update on Dow Jones as we accurately caught the December 20 bottom and today the 37000 target has been almost hit, so it might be a could idea to book medium-term profits:


I have to update our outlook now as a new pattern may emerge as per the late 2020 price action. That is an Accumulation Cylinder (as per Livermore's speculative model) that technically leads to a new High. The technical condition for this to arise is for the 1D MA50 to hold. In fact there are so far many similarities with November 09 2020, which was when the last Accumulation Cylinder took place:

a) The price is near the 0.236 Fibonacci extension. It was at that level that the rise stopped, the price took a relief break but the 1D MA50 held and the cylinder started.
b) The Ichimoku Cloud squeezed right before the Cylinder started.
c) Both rises that preceded the Cylinder started on a 1D MA200 (orange trend-line) rebound
d) Both were at the end of a long-term Channel Up.
e) The sequence that completed the Channel Up and started the Cylinder was a Zig Zag Higher Highs/ Higher Lows displayed by the bold black arrow.

On the other hand, if the 1D MA50 fails, we should most likely see an extension of the Channel Up. In that case Dow should hit at least the 1D MA200. Basically the most optimal buy entry in the past 6 months within the Channel Up has been the 1D RSI's Buy Zone (green zone).


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