DOW teasing us with a break back down below that major 1255 line...
It seemed the DOW broke up through that major (but weak?) resistance 1255 level into cyclic Bull market resumption area in a attempt to reach its 11500 TA target goal (Market correction due point) but met sellers on the way and broke back down under that 11255 level again.
Some could argue that short term temporary upward push was artificially caused by the influence of QE2 ... but in theory it still qualifies as a break upwards.
TA Target 10720 + (10720 - 9940) = 11500
Cautious at present but still bullish in the longer term...Green is good..eh
Hoop DOW is in a shocking downtrend if GOLD is your currency
Jeez - just over 10 years ago the man says ou needed 45 ounces of gold to 'buy the DOW' but now it only costs 8 ounces of gold
What a disaster ..... and still nobody really believes the US economy (and by implication the US markets) is truly stuffed .... munted in a big way
Chart of the Day
For some perspective on the stock market, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes a mere eight ounces of gold to "buy the Dow." This is considerably less (82% less) than the 44.8 ounces it took to buy the Dow back in 1999. While the actual Dow continues to make new post-financial crisis rally highs, the most recent rally that occurred in the Dow priced in gold is fairly similar to several bear market rallies that have occurred since late 1999. It is also of interest that the Dow / gold has often tested (and is currently testing) resistance (red line) of its accelerated downtrend but has failed to break through on each occasion.
The other side of the coin is that gold is in a startling uptrend dating back to 2002.
"Hoop, DOW is in a shocking downtrend if GOLD is your currency"
Correct me if I not included something but I think the chart is made up of 3 variable factors...Dow index priced in US$, gold price, P/E Ratio.
P/E ratio is gradually falling (long term secular style) and we expect it to fall another 50% before the secular bear market cycle ends which still could years away...downward pressure on chart.
POG expected to go up some say to $us2000......downward pressure on chart
US $ still in downtrend but treasury bonds look to be bottoming......still short term downward pressure on chart...but possible upside medium term.
These variable factors point to continuing downtrend action...
Been thinking about this chart Winner posted ...I know the USA economy is stuffed but by x6 fold decrease in the last 10 years ..I find that hard to believe.,,,something is over cooked here...8 or 9 is too low.....
to get back to a still low 15 it would need a 60% decrease in POG or 60% increase in the DOW increase or some sort of combination of the two...I can't imagine the annualised PE ratio rising by any large amount.
DOW teasing us with a break back down below that major 1255 line...
It seemed the DOW broke up through that major (but weak?) resistance 1255 level into cyclic Bull market resumption area in a attempt to reach its 11500 TA target goal (Market correction due point) but met sellers on the way and broke back down under that 11255 level again.
Some could argue that short term temporary upward push was artificially caused by the influence of QE2 ... but in theory it still qualifies as a break upwards.
TA Target 10720 + (10720 - 9940) = 11500
Cautious at present but still bullish in the longer term...Green is good..eh
2 1/2 weeks later the DOW is revisiting that 11250/11260 R&S zone again.
That huge 2.1% rise today did not break any technicals..however a small rise tomorrow will trigger a bull reaction which should see the end of this correction.
This correction sofar has been smaller than normal (about -5%) but it was predicted to be -10% or less.
Originally Posted by Phaedrus
There - that didn't take long did it!
.................................................. .................................................. .................................................. ..........................
Well a month later and the DOW has cracked the same 11260 level again after that early November false start.
Maybe the Bull rally this time ...eh?
Well Hoop, as far as I am concerned, the DOW has been strongly positive for over 3 months now. So long as this situation continues, I remain resolutely Bullish.
The 5 month "medium-term" uptrend continues, as does the 20 month "long-term" uptrend.
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 ..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
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?
Recent TA retesting actions of the DOW
Reply With Quote
Originally Posted by Phaedrus
Originally Posted by Phaedrus 
..The Dow ended the 2010 year up +11%
Bookmarks