Dow Jones technical analysis

[Porper]

How is this chart Chrislp? Not suggesting it is an Elliot Wave as it stands, simply asking if it had mirrored what I have drawn now would that satify as being an Elliott Wave pattern?

As somebody mentioned earlier, wave-4 cannot enter the price territory of wave-1. Wave-3 cannot be the shortest wave, but is usually the longest wave...especially in stocks. Another guideline...a correction often terminates at wave-4 of 1 lower degree as in your example. Not criticism...just some pointers to bare in mind.

 

[Boggo]

I would probably say that a W.4 cannot CLOSE within the territory of W.1 would be a more accurate rule for W.4 especially if you are using line charts.

 

[Porper]

I would probably say that a W.4 cannot CLOSE within the territory of W.1 would be a more accurate rule for W.4 especially if you are using line charts.

True, different analysts can use either rule. I prefer to not allow any price action into wave-1, at least in stocks. More volatile instruments like futures are different. The key is to stick to your own definition. There is no right or wrong.

 

[Ann]

As somebody mentioned earlier, wave-4 cannot enter the price territory of wave-1. Wave-3 cannot be the shortest wave, but is usually the longest wave...especially in stocks. Another guideline...a correction often terminates at wave-4 of 1 lower degree as in your example. Not criticism...just some pointers to bare in mind.

I would probably say that a W.4 cannot CLOSE within the territory of W.1 would be a more accurate rule for W.4 especially if you are using line charts.

I would be really interested to persue the Elliott Wave Theory with those who have a knowledge and an interest in it. It is a massive gaping hole in my knowledge and now I feel I am actually getting somewhere by talking about it.

However I am really disinclined to continue discussions on this thread as it is now totally off topic.

Is there a thread for Elliott Wave Theory on this forum? If not would someone care to open a thread where further discussions and examples could take place?

 

[shezian]

Where are you guys getting all your data from? How far back does the charts go? What year?

Thanks Sue

 

[Ann]

Where are you guys getting all your data from? How far back does the charts go? What year?

Thanks Sue

Hi Sue,

I use 'Incredible Charts' (free or by subsciption). They are a wonderful charting program for beginners and advanced chartists. Plenty of info on the site. Their history of Dow Jones Index goes back to Jan 1988. Not a really long term historic view but interesting enough to be able to scribble a few lines over the chart!

Cheers

Ann

 

[Boggo]

I would be really interested to persue the Elliott Wave Theory with those who have a knowledge and an interest in it. It is a massive gaping hole in my knowledge and now I feel I am actually getting somewhere by talking about it.

The bible of the KISS principle of EW is Dynamic Trading by Robert Miner. You have probably jumped an essential step by going straight to Frost and Prechter.
Also have a google of Carolyn Boroden for Fibonacci and subscribe her free email for daily sample charts.

However I am really disinclined to continue discussions on this thread as it is now totally off topic.
Is there a thread for Elliott Wave Theory on this forum? If not would someone care to open a thread where further discussions and examples could take place?

Type Elliott Wave into search above or just open a thread, there is probably enough on here already

 

[Ann]

The bible of the KISS principle of EW is Dynamic Trading by Robert Miner. You have probably jumped an essential step by going straight to Frost and Prechter.
Also have a google of Carolyn Boroden for Fibonacci and subscribe her free email for daily sample charts.

Type Elliott Wave into search above or just open a thread, there is probably enough on here already

Hi Boggo,
Thanks for Miner, you have just mentioned my oldest favourite KISS and my newest favourite EW. I will seek it out!

I never subscribe to anything. I learned years ago you just get an inbox full of cow pat/junk mail/scams which is damnably annoying!

Now can we ferkin' just st0p being off topic folks! The man will descend on us pretty darn soon!

Hi Joe!

 

[Ann]

OK, still persisting with Elliott Waves, I am looking at a weekly historical chart of the Dow set in Log scale with some historic Elliott Wave calculations from the book Elliott Wave Principle by Frost and Prechter pg 156 which I have repeated on this chart. The chart in the book cut out about 1980 but the chart I have goes up to the present day 2014. I have added my own Elliott Wave calculations from my still very limited knowledge of EWs.

It is interesting watching history repeat itself and it certainly looks like we are in for a lengthy correction if this current broadening top/megaphone/'jaws of death' shape evolves into its potential pattern outcome.

You will need to press onto the chart to see it clearly.

 

[Wysiwyg]

Highly accomadative stance on monetary policy by FOMC gives the bulls a continue to-the-moon cue.

 

[Wysiwyg]

OK, still persisting with Elliott Waves, I am looking at a weekly historical chart of the Dow set in Log scale with some historic Elliott Wave calculations from the book Elliott Wave Principle by Frost and Prechter pg 156 which I have repeated on this chart. The chart in the book cut out about 1980 but the chart I have goes up to the present day 2014. I have added my own Elliott Wave calculations from my still very limited knowledge of EWs.

It is interesting watching history repeat itself and it certainly looks like we are in for a lengthy correction if this current broadening top/megaphone/'jaws of death' shape evolves into its potential pattern outcome.

You will need to press onto the chart to see it clearly.

Not entirely absent analysis with the corrections being relatively minor but obviously the megaphone top hasn't been effective on this occasion. Gee whiz I learnt years ago not to resist the American bull.

 

[rimtas]

Gee whiz I learnt years ago not to resist the American bull.

Aussie bull will make a good lesson for many as well.(In terms of not resisting it)

 

[Ann]

Not entirely absent analysis with the corrections being relatively minor but obviously the megaphone top hasn't been effective on this occasion. Gee whiz I learnt years ago not to resist the American bull.

You may be right Wysiwyg!

It might catch a few people short if it resolves the way it looks by my calculations.

I have drawn on a twelve year daily chart showing two swing trade calculations. The first (A-B) showed a final outcome of around 21,020 and the second smaller swing trade calculation (C-D), which has yet to break out of its rising wedge pattern, also has an outcome of around 21,020. The upward breakout should it occur, may happen around October 7.

 

[Wysiwyg]

I have drawn on a twelve year daily chart showing two swing trade calculations. The first (A-B) showed a final outcome of around 21,020 and the second smaller swing trade calculation (C-D), which has yet to break out of its rising wedge pattern, also has an outcome of around 21,020. The upward breakout should it occur, may happen around October 7.

One month out but not a bad may happen. 20000 points has some nervousness attached to it with indicators diverging from price (not good reliability). I assume profits are locked in with
a. any further gains being sold into thus catching momentum traders
b. first to blink trips trailing stops

but cause not knowing
c. break 20000 and keep going

p.s. in other words, don't know which game the big hands will play

 

[Ann]

One month out but not a bad may happen. 20000 points has some nervousness attached to it with indicators diverging from price (not good reliability). I assume profits are locked in with
a. any further gains being sold into thus catching momentum traders
b. first to blink trips trailing stops

but cause not knowing
c. break 20000 and keep going

p.s. in other words, don't know which game the big hands will play

View attachment 69215

 

[Ann]

G'day Wysiwyg,

There seems to be a lot of doom and gloom talk about the DOW. Like 'everyone' knows it is going to crash. Elliot wavers are flying their flags, even Buffett was saying it is a gonner in some adds/articles. People were saying there would be brokers jumping out of windows. Why would they jump if everyone already knew the DOW was going to tank, they would already be out or heavily hedged. I feel like I am the only one feeling bullish which tends to be a contrarian signal for others over the years!

I have had my concerns it has run up far too quickly since Trump got elected. It almost seemed like they were all running it up for a final bailout. I was tempted to dump all my stocks but then I looked at them on a monthly basis and they all looked too damn healthy. (Mind you I do have Fool as my avi!)

I am going to watch the DOW for a healthy retrace. I am now feeling happier it has slowed and showing a rounding away from the 20,000 level as it is purely psychological and doesn't appear to have any technical basis for a fall away. I have looked at it on a daily, weekly, monthly and quarterly chart and nothing is telling me to cut and run. Sometimes I will see stuff on longer term charts that tells me a different story.

I can see two potential levels of a technical support. First would be the 19100-ish level of the rising resistance/support level coming from November 2015. The second level of support is the 200dSMA which has been a support twice in the recent past for a retrace in June 2016 and again in November 2016. While money flow is falling it has a long way to travel before I see anything alarming. If and when it falls below the 200dEMA I may have some concerns.

My final thoughts on the DOW is a quote by -

“Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.”

 

[Porper]

The Dow is not looking too flash i.m.o.

Looks like a topping pattern followed by impulsive price action lower. If correct this is only the start of a significant correction. More in depth analysis to follow later.

 

[Porper]

The Dow is not looking too flash i.m.o.

Looks like a topping pattern followed by impulsive price action lower. If correct this is only the start of a significant correction. More in depth analysis to follow later.View attachment 91144

Maybe the U.S has thrown us a curved ball. Amazing how the patterns can change in a flash.

This now looks like a good example of an Expanded Flat pattern. Impulsive higher so far adds weight to this wave count. If correct then it's up, up & away. My gut says be cautious but I have learnt to ignore this as it's simply emotion at the end of the day. Trade the patterns and ignore feelings.

 

[Ann]

@Sean K I thought you might be interested in this historic view of the Dow. My IC charts don't have as long a history with the Dow as they do with All Ords. I drew the line from approximately the same year I drew on the All Ords the other day. It won't be an exact comparison but possibly interesting enough. I am not really seeing a massive bubble here. Clearly, there have been bigger lifts above the line. This just looks like it needs a minor correction or possibly a sideway jog will see it back closer to the mean. Interesting to watch.

@Sean K thought I would add a younger chart for the NYSE as well.

 

[Sean K]

@Sean K I thought you might be interested in this historic view of the Dow. My IC charts don't have as long a history with the Dow as they do with All Ords. I drew the line from approximately the same year I drew on the All Ords the other day. It won't be an exact comparison but possibly interesting enough. I am not really seeing a massive bubble here. Clearly, there have been bigger lifts above the line. This just looks like it needs a minor correction or possibly a sideway jog will see it back closer to the mean. Interesting to watch.

Looks pretty orderly from 1980 up doesn't it. The run ups to 00 and 08 look a bit more bubbly. Hmmm