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Thread: Dow

  1. #701
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    TL....... short term market influenced by media events are soon forgotten. In reality..when a market gets toppy and bearish divergences appear the investors and media will ignore the good news and focus on any bad news (even a week late news will do) as an excuse to get out.

    When the market has bullish momentum as it did last week this announcement (28th Feb) Euro little changed after S&P cut Greece to "selective Default" which I considered very bad news never got much mention as it virtually says S&P has downgraded Greece from CCC to C which is the lowest grade possible. C is the default level with two parts, a better selective default or the worse disorderly fault. Finch also downdraded Greece to this level as well. Usually this downgrade stops foreign bold holders from investing further money as it is near 100% they will never see their money again...so foreign funding to Greece become nigh impossible...strange and bizzarre that Mr Market dismissed it until today................ so todays news comes as no surprise to me charting the DOW as Mr Market is using this excuse (a catalyst) to correct an overdue toppy market.

    The Dow fell 204 to close at 12759. It tested the first major support of 12750 (12753) it dipped below it intraday (giving a warning that this major support may fail in days to come) ...then closed above the support again at 12759. (see my chart in above post).

    Forget the media BS......Technically, the DOW outlook has to be viewed as a negative........ todays event should be considered as a possible start to a Bull Market Correction.
    Last edited by Hoop; 07-03-2012 at 10:29 AM.

  2. #702
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    Default Beginning of a Bull Market Correction?

    A few days after my above post Europe gave Greece an expensive pill and was told it to go to bed and rest..... the global market was happy with that and the US Equity Markets bounced off that 12750 support and continued their Bull Run and squeezed out another 4% rise..In April the worries returned and the 12750 support got busted only to bounce back up to resume the bullish mood creating a 12710 support with an equal top .....until now!!
    Now we are at another TA critical juncture today a break of that 12710 support to a lower low. The very slight Broadening formation has been created, it is descending in character, that being of equal tops and lower lows...this formation is under threat of a breakout to the downside as well.


  3. #703
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    Default Bull market Correction is happening

    The DOW broke out downwards from its slight broadening top formation towards its target of 12100.
    This target will need selling pressure (e.g bad news) around the support zone if this target is to be reached...
    In the meantime the downward movement has been arrested by a pullback which is common event (occurs 50% of the time) after a formation breakout.
    Expect this pull back to test the bottom boundary of the old broadening top formation or it could go back inside it to test the 12700 area. If the pullback fails these tests expect the DOW to fall again towards it's target 12100 testing the support zone.
    If the pullback is strong and busts back through the 12700 area expect it to rise to 13000 in it's quest to gain a new high which would indicate the Bull market Correction is over.


  4. #704
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    Default DOW Theory signals a primary bear tide

    A Bull market correction in progress??... or.... has the market topped out and the Bull has died??..........

    Dow Theory says the Bull has died.

    How relevant is DOW theory in today's world is debatable...however it's called a theory because of its proven track record....and it's has been impressive.


  5. #705
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    Hoop - might be interested in this chart from Chart of the Day

    Only 8 oz gold needed to buy the DOW now compared to 45 oz at the end of the bear market in 1999

    Maybe the decline is slowing and we might see a decent resurgence in the DOW - atleast in gold terms that is
    Attached Images Attached Images

  6. #706
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    Quote Originally Posted by winner69 View Post
    Hoop - might be interested in this chart from Chart of the Day

    Only 8 oz gold needed to buy the DOW now compared to 45 oz at the end of the bear market in 1999

    Maybe the decline is slowing and we might see a decent resurgence in the DOW - atleast in gold terms that is
    A possible a secular connection???? (correlation)... Pity the gold standard alters the gold variable so I imagine we can't get a longer term chart thats reliable.

  7. #707
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    Default 17 May:- DOW Theory signals primary bear tide

    Dow closed at 12742 today ... Recent media is signalling that the correction is overAll the buy triggers have gone off
    Hmmm ...they assume the DOW and S&P500 is still in a Bull Market Cycle.


    OK the 21st Century debate consensus is that the DOW theory is not as good as it used to be....

    If the DOW theory is correct however ......the correction has not ended, it has begun in a form of a bear market rally (sucker rally). TA buy triggers go off with these types of corrections too.

    So whatever you believe is happening atm just be careful around certain resistance points. Fibonacci Retracements between 1/3 and 2/3 area are typical secondary correction perimeters Since the retracement off the bottom has passed through the 50% the next area to watch is the 61.8% which is the 12850 area (not shown on chart). 13000 is another resistance area... both these areas are investor behaviour sensitive (psychological).


    If this is a bear market rally expect the rally to peter out below the previous high. (13300)
    If this latest rally creates a new high DOW Theory has failed (Modern day Failure rate less than 20%???) and the bull lives on.

    Update of Post #843 Chart (22nd May 2012)

    Last edited by Hoop; 22-06-2012 at 09:21 AM.

  8. #708
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    Quote Originally Posted by Hoop View Post
    Dow closed at 12742 today ... Recent media is signalling that the correction is overAll the buy triggers have gone off
    Hmmm ...they assume the DOW and S&P500 is still in a Bull Market Cycle.


    OK the 21st Century debate consensus is that the DOW theory is not as good as it used to be....

    If the DOW theory is correct however ......the correction has not ended, it has begun in a form of a bear market rally (sucker rally). TA buy triggers go off with these types of corrections too.

    So whatever you believe is happening atm just be careful around certain resistance points. Fibonacci Retracements between 1/3 and 2/3 area are typical secondary correction perimeters Since the retracement off the bottom has passed through the 50% the next area to watch is the 61.8% which is the 12850 area (not shown on chart). 13000 is another resistance area... both these areas are investor behaviour sensitive (psychological).


    If this is a bear market rally expect the rally to peter out below the previous high.
    If this latest rally creates a new high DOW Theory has failed (Modern day Failure rate less than 20%???) and the bull lives on.
    This rally has topped out at 12837 (closing high) very close to the Fibonacci 61.8% retracement level.
    The DOW had its 2nd worse fall of the year saved by the bell again finishing at 12574 down -251 (-1.96%).

    Is this the end of the rally?..............Maybe, maybe not, it could be a pullback to test the neck line support*** around the 12530-12540 area... factoring in this terrible day, technically speaking this rally did not break-down..it is still intact. ....(as long as it stays above the neck line support)

    ***Looking at the above chart, the head (inverted) formed at the beginning of June 12035 and the neck and shoulders are around that 12400-12550 area either side of the head. (Mirror image)
    Last edited by Hoop; 22-06-2012 at 10:28 AM.

  9. #709
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    An interesting Friday close this week with the indices all up around 2%. On Thursday the markets were dull all day then rallied strongly in the last hour and that followed through to Friday. Is it sustainable, or is it a bull trap?

  10. #710
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    Update chart from 16 June

    Airedale..hindsight has shown an established uptrend...it seems to be a weak trend so far (the lack of volume) so we have to wait and see. Another Euro upheaval these last couple of days has not created any breaks to this trend..yet!

    *****That possible Head and Shoulder formation never eventuated, the shallow uptrend channel pattern took over instead.


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