Recent TA retesting actions of the DOW
The Dow retested its new major support line today (11255) and respected it to move back higher to close at 11357 (up 10)
Note how it did this retesting mini correction action after it broke its previous 10720 resistance (blue circle).
Also of TA interest was the pull back retesting of its falling wedge after break out
http://i458.photobucket.com/albums/q...10intraday.png
Who believes in Historical Odds?
2011...Will it be another Year of the Bull or is it Bear-time once again?
Well, we now know who won the race in 2010? The Bulls :t_up:..The Dow ended the 2010 year up +11%:)
Good news..eh another "up" year following the 2009 year of +19% :)
Therefore 2011 going to be better, especially with the global economy in recovery mode, you would think..huh?...Out with cash and lets buy up stocks...3 years of a rising market is common I hear you say...the dates and figures below proves it so...eh
1924 - 1928....4 years in a row
1933 - 1936....4 years in a row
1942 - 1945....4 years in a row
1949 - 1952....4 years in a row
1954 - 1956....3 years in a row
1963 - 1965....3 years in a row
1970 - 1972...3 years in a row
1985 - 1989....5 years in a row
1991 - 1999....9 years in a row...wow:eek2:
and 10 years have past us by ...so ...we must be overdue for another 3+ years..eh
Ok..party pooper time... here's the bad news....note the blue date
History shows us that since 1901 ...only once has there been 3 "up" years in a row in a Secular Bear Market Cycle
1970...+ 5%
1971...+ 6%
1972...+15%
The DOW has seen many 3+ "up years in a row within the Secular Bull market cycle as shown above (the black dates)
.... unfortunately the DOW is presently in the middle of a Secular Bear Market Cycle (2000-????):(
It's 2011 now and it's another blue date... do you still feel lucky?
2009 - 20??....? years in a row
Bull Market Cycle RIP 2/8/2011
That rare 3 years of rises in a secular bear market is looking distant now
The DOW Theory just signalled a primary tide Bear Market confirmed on the 2nd August 2011.
This event happens when both primary up trendlines break...... the DOW Ind index gets a confirmation with the DOW Transport Index or vice versa.
Edit: forgot to add the extra requirement ::: as well as the primary trendbreak, the index has to drop below their previous low point (Not drawn on the chart)
The DOW theory although looks simple on a chart is a highly reliable signal indicator.
http://www.imageurlhost.com/images/m...0hup337jf0.png
The DOW Chart is looking very ugly
Quote:
Originally Posted by
winner69
ZERO jobs added ... and down the DOW etc goes
ZERO jobs should be good news for the market .... bullish in the short term ..... will make the Fed do something to stimulate the economy ..... but that would only make the inevitable crash even bigger when it does happen
Winner..yes that rise did not happen.....another warning sign..ehh??
It seems from the technicals that investor behaviour is becoming "strange?"..something like an uneasy calm before a storm......there must be insider rumours operating to get these technical patterns forming (not all shown here).
My survival instincts are flashing a "get the hell outa there" sign..
11600 resistance tested and held... the possible Dead Cat Bounce (DCB)target 11600 has been reached...this could be the start of the "rout".
My chart below.....the yet to be complete DCB formation has a flag incorporated in it (Flags are not a formation on their own)...A flag raises the chance the DCB formation will be completed successfully.
Thomas Bulkowski cites a flag as being "road kill" within a trend formation ...a small bump on the highway...it this case the steep downtrend highway.
Its becoming clearer that this "reinforced" DBC formation when competed (breaks the 10700) is going to hurt long investors.
The failure rate of flags in a downtrend in a bear market is very low. For the optimist..if a flag continues it turns into a rectangle or triangle formation with better failure rates..This flag on the chart below is nearly "done" therefore it should breakout downwards any day now..if not it turns into a triangular formation and creates a slightly upward holding pattern until the lines nearly intersect around November.. this is unlikely though.
Where to if the breakout downwards occurs??.......failure rate is low so expect the 10700 support to fail.
Target price 11600 - (12750 - 10700) = 9550
Target prices are influenced by well established Support lines ...there is one at 9700 going back to Jan 1999 which has been tested numerous times. I suppect that this 9700 will be the next pause.
http://www.imageurlhost.com/images/k...k57p03rtyt.png
DOW still technically broken
A significant technical event happened today on the DOW..a retest failure which is bearish...surprise surprise you may say.
Well...not everyone is in an agreement that the Stockmarket is stuffed. I've had a couple of very optimistic people telling me that a very rapid rise is about to take place basing their limited knowledge on this double bottom / semi-complex Head and Shoulder looking formation....Hmmm...well... the neck line broke and the retest today failed ...I dent in their optimistic thinking...probably not as there is tomorrow and the next day etc for the DOW to do another retest...If it does succeed it will throw the cat amongst the pigeons or a better phrase throw the bear into the bull ring.
It has to be remembered that the countries that are economically in the crap still have their stockmarkets in cyclic bull market cycle...its the economically sound Countries such as China India Brazil Australia etc that have their stockmarkets in a cyclic Bear cycle...a paradox? ..nah..it can be explained by Stockmarket Theory.
So.. with the DOW and S&P500 displayng this strange type of bullish H&S formation within what is thought to be a bearish Dead Cat Bounce There is obviously evidence to recite for both Bull investors and Bear investors......so who's right??
TA tells the past and the "now" not the future so we don't know who's right or wh's wrong.... yet!!!
However past history gives us a better chance of being right and when TA formations gives conflicting signs you add many other TA indicators and other stockmarkets that have an effect on the one you are trying to make sense of.
so...caution is advised as the bigger picture still looks bearish...for example my chart below still shows the DOW in an area of grave concern...It is still flaunting with the cliff edge and until it moves away from this area I'm staying bearish and away from the market.
Today's bearish move down away from the retest back towards the 10700/10600 supports and the candles having wicks both indicate that the selling pressure has returned....this highlights the need to be cautious and bearish rather than blindly optimistic. ATM with this volatility, the reward could be 8% (target 11860) but the risk is a larger 10%, a possible capitulation down to 9600/9800 target if the 10700/10600 support breaks.
http://www.imageurlhost.com/images/7...udltzpdfjf.png
Cyclic Bull Market Market Recovery
It seems from the recent number of positive confirmations that the 20% decline was in fact a very large Bull Market Correction...therefore climbing to a new high is quite possible
The DOW seems to retest everything atm so expect a 11900 support retest when this relief rally loses momentum
If the 11900 retest holds then expect the 12380 Resistance level to come under attack...
If the 11900 retest fails then the resumed up trend line comes back into play (orange dotted line).
http://www.imageurlhost.com/images/s...0lvyetum5n.png
Dow technically broken again (repair failed)
Its all bad news....The US stockmarket is broken again...The suddeness is the worry..Expect the DOW to retest the next watched line (orange) 10700 if it fails to get above that old support (now resistance line) 11555 (orange)
EDIT 30 minutes to closing There is a rapid late rally to regain some losses..very importantly it has regained the MA50 and the11555 to be at 11622 a very bullish very short term scenario.EDIT 10.49am...then it turned to custard again to close at 11547 ....support 11555 failed but still above the MA50 (11533)
http://i458.photobucket.com/albums/q...OW21112011.png
Intervention to attempt Technical Repair again...a genune rally this time?
Today we have witnessed Market Euphoria due to a good dusting of pixie dust.
When it wears off...the big bogey of the market intervention effecting market signals will appear...Just look at my chart!!! a red/blue arrow mess. Hoop does not like his charts being messed around like this...from my past experiences this is a bad omen.....where's the exit?
EDIT: DOW closed at 12044 (+4.23%) higher the best day rise since March 2009 (the end of the last bear market) ....on my chart the close is testing the top trend line of the pennant feature (my highest orange dotted line to watch).
If 11900 support holds and this downward sloping line is breached expect the testing of the 12230 /12280 resistance zone (not marked on my chart)
http://i458.photobucket.com/albums/q...OW01122011.png
Technical Repair successful Genuine rally confirmed (chart update from 30th Nov2011)
The DOW has again today confirmed its resumed cyclic Bull market cycle by beating its May 2008 13000 high ....so the market is looking very rosy for the time being.
Quote:
Originally Posted by
Halebop
Not surprised it looks likes a fizzer against some of those benchmarks. To me the Dow is merely approaching the top of its 15 year (15!) range. At least the likes of 1987 and 1921 were making new highs. Still, a low of 7,000 to 13,000 in 3 years is nothing to sniff at.
The DOW can still travel some distance upwards....but...14150 is the primary resistance level with theoretical secular bear market constraints. This is the ultimate hurdle to jump some time in the future.
As the market climbs it increases the secular bear gravitational force.... Theoretically the physics show that at the 14150 level the index will then have such a big gravitational pull back to contend with, it will struggle to keep going up and will eventually fail.
Therefore increasingly well above average buying demand will be needed to combat that increasing gravitational force.
Secular bearwise..... 14150 real estate area includes a bull cemetery
Note :..The S&P 500 is already moving upwards in this real estate area
http://i458.photobucket.com/albums/q...OW28022012.png
Bernanke Testimony to Congress
I looked at Bernanke testimony/address to Congress on CNBC.
As CNBC puts it.
"Stocks dipped into negative territory Wednesday amid Fed Chairman Ben Bernanke's testimony to Congress on the economy"
Something of an understatement.
Dow is at 12948 as i write this. Down 107 from the intraday high.
When I started watching cnbc about 4.00am NZT all 12 Europe exchanges and indexes on Yahoo Europe summary were in the green.
After his speech all had declined and 4 are in the red.
Dow composite hit an intraday high of 13055 up about 50 before the speech.
The DOW declined as it got closer to Bernanke prepared speech (some may say spin) and rose somewhat on recognition of positive factors (eg employment, signs of recovery) and then declined on negative factors (eg Euro).
Biggest decline (and wealth destruction) was when Congress spokespeople had 5 minutes each to make points and ask question (some may think of this as grandstanding).
If the initial US players negativity is not reversed then World markets including NZX and ASX may be in for a hit today.