Posts Tagged ‘Dow Jones Industrial Average’
The Dow Jones Industrial Average Starts a Recovery
Last week’s volatility in global stock markets appears to have resolved positively, and the Dow Jones Industrial Average is very close to confirming key reversal signals that could prompt a recovery of up to 7% from current levels to the 10,920.3 level. Last week’s bullish engulfing candle (see the weekly chart below) provides the catalyst for the optimistic outlook. This weekly candle was preceded by a sharp 68.2% Fibonacci Correction bouncing off the April high, and can be seen as a three-pronged minor correction phase. Check out the Weekly Chart below.
This is the way the Weekly Chart looks:
A mere 87 points stand between 10,211.1 and the 10,298.2 level needed to be broken in order to leave the 9757.5 low behind and written to history. It is this event that would create the opportunity for a recovery to 10,920.3. Please check the Daily Chart below.
This is the way the Daily Chart looks:
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The Dow SPDR Trust Series
It seems the Dow Jones Industrial Average will not leave the headlines alone. It stands as I say and no one can dare prove me wrong, because they can’t. It is exactly as I mentioned it in my previous article on the Dow and that same thing exactly is what brought about about 50% of the September 2008-February 2009 avalanche, NOT any maneuver of putting massive stop-losses by Market Technicians or any other single investor or even the effect of the herd.
Granted that caused half of our woes, but their greed caused the start of the stocks falling down. But they hide, and the Congress and the Administrations, previous and present–continue to hide the incredible gnawing greed that caused the suffering of billions of people around the world. By selling-short, or selling what they have, in millions of share equity, they caused the panic–staying out of the bitter ending–and then, when they decided, they bought back slowly what they sold, quietly so no one will hear of it.
At any rate, third is the Exchange Traded Fund of the Stock Index called D.J.I, or the Dow Jones Industrial Average Index. This E.T.F tracks the DOW 30 and gives traders an opportunity to buy a priced version on this index that is otherwise not trade-able. The Monthly Chart shows how my OBV–EMA,3,-1 trading method shows a clear long-term buy signal, plus the RSI is in a good buying position, and the Daily Chart with the same method used has, at the lowest point technically correct come to a buying position.
This is the way the Monthly Chart looks:
This is the way the Daily Chart looks:
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OOOooops!!
I was wrong. The rule “buy at breakout only” slipped right by me this time. No, Technical Analysis is not to blame for MY mistake, only yours truly. Fact is I WAS right about the Dow Fiasco and I did say the S&P 500 was due to make a correction, then recover. Nobody has a monopoly on accuracy and I take full charge for the words I wrote in this page not so long ago.
But, now that there is a breakout, I can say truly that according to Technical Analysis the truly Mighty US Dollar is headed in a new upwards trend that should take it up at least 10% in the next few months or so. Time is hard to judge with Technical Analysis and we only have the time-frame of the broken-out triangle shown below to help us. This is the large, long-termed Monthly time-frame and its symmetric triangle pattern HAS been broken upwards, so be patient in investing on the FOREX Dollar Futures, it’ll get there in time with a target of 92.3 points on the DX Futures. There is no SURE THING!! but here there is about a 70% chance that I am right which is better than the 50-50 of tossing a coin.
This is the way the Chart looks:
