Repeating the chart I drew 9 days ago on tradingview.com shows DOW INDUSTRIALS INDEX sticking closely to the downward path I laid down with very little wandering off-track. The green curved line shows that there is considerable scope for varying from the path while still continuing downwards. At present the graph is half-way between the original prediction and the...
The present rebound in the NASDAQ does not indicate that the downtrend is over. There is plenty of scope for the upswing within the downtrend. However, the softness of the bottom indicates that the overall correction may be much less than I previously predicted and the downtrend may come to an end in mid-year rather than year-end. Watch to see the rebound end then...
The Euro's peak hit a new height, forcing us to review our current channel. I have drawn Resistance and Support Zones instead of lines, to articulate the ambiguity. The trend, of course, remains upwards; downswings probably remain gradual.
In my last Euro post I displayed a 23 year chart and justified my 2016 Projected Upslope. Today I zoom in on the current spike. I draw a speculative Resistance Line parrallel to the Current Support Line. If the graph repeats the pattern of December's spike, there may be a gradual rather than a sudden drop back to, and no further than, the Current Support Line.
The graph shows the performance of DOW INDUSTRIALS since 1995. Human institutions, like nature, are creatures of pattern. Expecting this graph to repeat the patterns of the past, I draw two S shaped curved lines linking the expected bottoms and tops for the coming period. I expect the downtrend to continue for the entire of 2016. A further 7% will be lost in this...
The Euro jumped 2% today against the US Dollar. I reckon this is a spike and it will now fall back, though perhaps not by the entire 2%. The chart shows the entire history of the Euro against the Dollar, going right back to 1993. The uptrends have been consistently more or less at the slope I projected for 2016. Coming down off today's spike may bring the graph...
While the US Markets rebounded last week, they are still within the parameters of a Bear Market. DOW Industrials shown by orange coloured graph and trend lines, and NASDAQ 100 shown by blue graph and trend lines. Neither appears near the end of the current correction; so the Bear Market is likely to continue for most of 2016.
Reviewing the long-term patterns, it seems likely that the present rebound of both the DOW and the NASDAQ will be short-term. There is considerable scope for further correction, and few hopeful headlines in world economics.
This could be the bottom of the current downtrend. The graph dipped momentarily to 4000; but the realistic bottom was 4100. Next resistance point around 4400. Looks like January will finish lower than it started: signalling an overall Bear Market for the year. Then I will expect the downtrend to resume when the graph hits Resistance Line R.
My last post anticipated a possible lowering of the bottom of the current swings and wondered if the new bottom would fall as low as my green dotted line. The new bottom did not fall that low and seems to define the Support Line for the emerging uptrend. It is a fair bet that for the coming while, the graph will stayh within the range depicted by the purple box...
The "Lowest Bottom" line joins the lowest bottom in 2001 to the lowest bottom of 2015 (3 Dec 2015). A strong bounce ensued when the graph hit this line. The "Overall Upslope 2016" is drawn in parallel to previous upslopes and is my attempt at predicting the overall upslope of 2016. An uptrend is necessary because the Euro is undervalued viz.a viz. the US Dollar....
The Nasdaq downswing may be bottoming out. My original target of 4060 may be correct after all - for now anyway. I am happy to exit my short now and wait to see what happens. It is quite likely that there will be an upswing soon. When the upswing reaches 4400, the question is "will it continue, or will there be another downturn?"
The rate of decline of Nasdaq has intensified and it seems likely that my previous target of 4062 will be overshot. Resistance may be felt at 4000, but it may overshoot that mark as well.
By previous long-term patterns, the green dotted line seems to be predictive of the upslope of the Euro against the US Dollar in the coming year. Having hit a peak on 9 Dec 2015, the security has been gently sloping downwards towards this Support Line. However, it has raised its bottom and appears to be unwilling any longer to be constricted by the top of the...
Sterling is weakening against the Euro, despite better economic performance in Great Britain, because of fears of a British exit from the European Union. Support will be felt at 1.26
On taking office in Jan 2009, President Obama introduced Quantitative Easing and Zero Interest Rate Policy, immediately stimulating the markets into recovery from the economic collapse of 2007/ 2008. Money was induced back into equities; share prices followed a steep upslope, (with economic recovery following), until QE and ZIRP ended in 2015. The correction...
It seems that the DOW correction is complete. We should see the value of the DOW INDUSTRIALS index rise to 18,000 by summer 2016.