$DJIA – Bart's Charts

Targets a plenty ….

02/24/2020

UPDATE: well today was a pretty smashing day as “days” go but in the big picture it’s really nothing. but, he fact that the NYSE Index hit the target – from the all time low – so nicely, we do have to be defensive as explained, roughly a month and a half ago …

updating the NYSE Index for potential targets and you can see 11500-12100 ish as the most likely move … that’s roughly 7-20%. yes, I know that is a big range but all I’m doing, for now, is looking at past corrective measured moves and projecting down. as can see by the below chart, the blue and red arrows have been responsible for pretty much EVERY correction for the past 20 years. so, isn’t it a high probability that this is where the market will go? Seriously, take a few minutes from your ADD Social Media frenzy to study the chart below … folks, it’s EXACT. EVERY CORRECTION HAS BEEN EITHER THE RED AND/OR BLUE ARROWS. also, take a peak at the 2007-2009 thump. that correction was harmonic to the blue and red arrows being 2.236 (square root of 5 and one of our ratios) * blue arrow and 2.618 (Fibonacci) * red arrow. hence, all of the corrections have been harmonic. now that being said, we have finished a LOT of 5 wave sequences sooooo this corrective move might go a little deeper than any of us think BUT a pattern will emerge to give us an opportunity to BUY … so just chill out, turn off the news and, well, hang on.

rounding out everything from the previous post:

if you have been following my blog of late, I’ve slowed down posting because I was ‘waiting’ for some targets to be hit … it looked like a high level broadening triangle was at work – WRONG. 🙂 and w/ the recent breakout to the upside I had to erase pretty much all of the major indices and, well, go LONG TERM and look for ‘other’ patterns / targets to come into play … well, they have and did last week.

here’s a look at the long term targets that have been hit or are less than 1% away from being hit. if these charts were intraday or daily charts then I would ‘wait’ for 1% but when, in the case of the DJIA, we are looking at a projection a mere 124 years in the making then I’ll take a percent here or there …

in no particular order …

Dow Jones Industrial Average: the all time low on the DJIA was in 1896 at 28.48. Using that low as A we move the line sector AB into the high of 2007. Mulitplying that by 1.618 to get the 1.618 price projection we get 29415. Looks like that was hit on Friday. also, note the dashed green lines going from the all time low up into the 2007 high. same measured move into the 29415 high.

if we put a 14 period RSI on the chart .. yup, we would have bearish divergence present.

New York Stock Exchange Index: take time to study the notes on the chart. bottom line – multiple confirmations (different techniques) of strong resistance

NASDAQ: 1.618 price projection target hit and closed right on it Friday. Also, note we have an overlapping 1.618 extension target hit …

one last, our target zone for the XLP/NYA ratio was hit … continued strength will show the defensive move into staples by the big boys. watch this ratio closely ….

DJIA 1.618 Extension Target from 2007 HIT … just saying.

lot’s of cool math, music and square roots – the NASDAQ getting ready to run?

it was ALL THE WAY back in Feb 2015 that I did a post on the upcoming resistance of the NASDAQ and then the breakout to new highs … did it for Andy @seeitmarket here: http://www.seeitmarket.com/nasdaq-trend-line-converging-with-2000-high-breakout-14142/

in that post I wrote:

“let’s remember that this is a 40+ year chart, so setting up that move could take some time.”

one could argue it took almost 20 months …sheesh. anyway, let’s take a look at some “stuff”

how “strong” is the NASDAQ? Do a ratio analysis quick look:

what are we doing here:

make a ratio: NASDAQ / DJIA
- IF chart going HIGHER THEN the NASDAQ is stronger than the DJIA
- IF chart going LOWER THEN the NASDAQ is weaker than the DJIA
- NOTE, we’ve been slowly and steadily stronger than the DJIA (chart doesn’t lie) but NOTE there has been no BIG move, yet.
- Stair Steps UP (where no swing low is broken) are powerful indicators of an underlying trend ….this trend is strong in a relative strength sense…
- folks, again, IT TOOK 14 YEARS for the NASDAQ relative strength to retrace .382 percent of the 2000 blow off tech top. Slow and steady move higher …
- HERE’S the KEY …note the RSI. the support transition that has occurred tells you that the market has possibly shifted into a much more bullish mode and is one that should be noted and taken seriously! frankly, we might be on the verge of a big parabolic move like 2000 … g
PATTERNS work ….note the blue shaded areas, those are “likely” targets for this move … could it go to new all time highs? Yes, the RATIO could do that but, for now, let’s pay attention to the breakout about to occur at the .382 (red line)

the chart above is a “long term” LOG chart of the NASDAQ from it’s all time low …

note the two red trend lines. the lower trend line is pretty powerful and price is just clinging to it …with this breakout to a new high I believe the NASDAQ has, at a minimum 10% move coming into the 6100-6200 level.
also – NOTE the FRACTAL on the RSI. It certainly appears to be doing the “exact” same move ..
- a high, a couple bumps and then a dump into a low and then a move higher to build negative divergence.

6100-6200 represents THE AB=CD from the all time low and a 1.27 extension from the 2000 high … as a pattern recognition expert – this SHOULD BE SIGNIFICANT RESISTANCE.

“I think this is a song of hope …” Robert Plant Live Stairway to Heaven

The S&P 500 has been climbing a stairway to Heaven ..

folks coming into 2015 we had some pretty strong patterns appearing. some worked and some didn’t – isn’t that what we expect? that being said, it was prudent to be cautious due to their presence.

here’s what I posted around a year ago:

“Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.”

so, while we’ve sold off for the past couple days let’s not go crazy. we have broken ONE swing low and that’s it, and it’s ONLY a weekly. WE HAVE NOT BROKEN A MONTHLY SWING LOW.

so, keep it ALL context of the big picture. We break a swing low on a MONTHLY and then a second then we have “issues.”

but for now, EVERYONE knows this puppy was on steroids and need some shaking out so let’s look for a pattern to BUY on a weekly (hint hint – it needs to breathe a bit) and if a bear I would still be very cautious.

what do we know and see … ?

we know a weekly swing low is about to be taken out and we’ll know that ONLY WITH THE CLOSE TOMORROW … we also know this has NEVER happened since March 2009 bull market began.

so, here’s the logic:

if weekly close below a swing low … get defensive.
if not, then keep in mind, we have pressure on the downside and it probably needs to breathe down so just chill …

enjoy the post below .. you’ll see some of the patterns were early, some were spot on. that’s not the point .. the entire post below is around the market action around a SWING LOW or SWING HI and to respect them — very very strongly.

let me know if you have any questions.

chart below is the ES .. note the red horizontal swing lows. those have never been broken on close. it might happen tomorrow …

Bart

As we have discussed multiple times in this venue, the move since 2009 has been one heck of a ride. This chariot of stock market emotion is, literally, off the charts. It is at an extreme that has surpassed 1929, 2000 and 2007. For the past 6 months it has defied the powerful cycles and patterns we follow. However, we are at another “potential” inflection point and based on this weeks price action the chariot appears to be running out of gas. So, objectively, the cycles and patterns we follow appear to be working. Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.

Below you’ll see a quick demonstration of the Dow Jones Industrial Average from 2002-2009. No patterns shown but just an example of the power of the swing low. Take note, when we lose one swing low there is usually some selling and then it bounces back and, here’s the key point, it fails to make a new high. Price might congest in this area (going either direction – up or down) and then it starts down. One thing to watch is “usually” the third swing low. When that gives away, selling is vicious. So, as much as we see MAJOR patterns completing let’s not get to confident. THE MAJOR US INDICES HAVE NOT BROKEN ONE SWING LOW IN 5 YEARS. Over the coming weeks, pay attention to these swing lows and swing highs (note the VIX chart – not one swing high has been taken out since 2007!)

Also, note the Dollar Index swing low track record and the very thin neckline that is coming into play a little lower. We’ve reached some daily extremes in metals (Gold, Silver) and the Euro and Pound. Sentiment means nothing when a multi year extreme is taken out and one that has been tested roughly 10 times since 2012. Folks, a lot of stops are hiding beneath 78-79 on the dollar index. Certainly hope support holds here …

so, keep an eye on the swing lows and highs over the coming days and weeks … note price action after a first or second swing low is taken out and, seriously consider safety if/when a 3rd long term swing low is taken out to the up or down side ….

Swing Low, Sweet Chariot ….

around the world update … part II

Around the world update …

the link above is where you’ll find our around the world cruises since August. this post is an update …what do we see?

nothing has changed, significantly.
none of the international indices have made new highs like the US equity markets …
patterns have provided resistance, BUT not necessarily overt sell signals
for the BEARS we are concerned about the SIZE and STRENGTH of the past two weeks of candles. the only country that doesn’t have this feel, as we see the world (literally) is Japan. The European ETF’s show strength in the bullish weekly engulfing patterns.
for the BULLS this is a good sign HOWEVER I’ve enclosed a chart of the DJIA that shows a very strong move UP from the low 9-10 days ago but a VERY significant lack of VOLUME. the VOLUME was BIG going down and SMALL going up (in fact it decreased) hence I find this to be overtly bearish. A very nice 5 waves down can be seen in most of all the indices except the NASDAQ but that is also completing a 1) 5 point reverse wave, 2) 3 drives to a top and 3) all of em’ are smacking into the .786 retracement from 2000. If the US Market starts down again in a “daily C wave” or “continuation 3” we find it hard to believe that the rest of the world won’t also …
so, we believe this week will be pivotal …
last, believe it or not, the Dollar is going to be Gorilla that get’s this thing truly rocking and rolling ….one target was hit and held late Friday afternoon.

Gorilla’s juggling dynamite … and the US Dollar

Here’s a representative example of the VOLUME going UP on the way down and VOLUME going DOWN on the way up …

Equal Octave Scale of Music and the DJIA …

my friend, fellow chartist and trader gave me the chance to do this post on his blog as a “guest blogger”

http://allstarcharts.com/the-math-behind-historic-dow-charts/

at the time, I was watching, extremely closely, the “standard” .618 price projection and it’s importance due to using the all time low from 1896 at 28.48. the market opened/closed in and around this level for roughly 5-6 months an then exploded higher.

one of the lesser know price projection techniques is actually based on the equal octave scale of music. this is NOT going to be a diatribe about musical theory, if your so inclined see a website like this: http://www.phy.mtu.edu/~suits/scales.html . as a trader, I know the musical note ratio’s and I also have some fundamental understanding of the importance of square roots and their inverses and we’ll leave it at that….

so, if we take musical note F# ratio of 1.68179 and then subtract 1 we get .68179. that is the multiple that we project from and that nails the recent high and also intersects the expanding triangle that is bearish. (1.618-1 = .618)

stay tuned and as we’ve been saying for a while, things certainly seem to be adding up ….

DJIA and musical note F# of the equal octave scale of music

the DOW components, in charts

Aristotle, Diogenes Laërtius and the Dow Jones

Abstract: The moral stated at the end of the Greek version is, “this shows how liars are rewarded: even if they tell the truth, no one believes them”. It echoes a statement attributed to Aristotle byDiogenes Laërtius in his The Lives and Opinions of Eminent Philosophers, where the sage was asked what those who tell lies gain by it and he answered “that when they speak truth they are not believed“.^[3] William Caxton similarly closes his version with the remark that “men bileve not lyghtly hym whiche is knowen for a lyer”.^[4]

the BOY who CRIED WOLF or the CHARTIST who CRIED CAVEAT EMPTOR

DOW JONES COMPONENT SUMMARY: this next week will mark, yet another, very important point in TIME for market to heed. As seen below, targets and patterns are/have completed (ing) and let make one thing clear. I am not personally tied to what the patterns are objectively showing. So, I never have nor ever will “lie” like the fable states above. I am simply stating the patterns are showing SELL patterns and as one who has said this before, it’s a very very precarious market. But, w/ full disclosure I have been saying that for a while and the market keeps exploding higher. So, I could be construed as “crying wolf” so to speak.

enjoy the charts and thanks for the comments, questions …

one last — W O L F !!!!!

DOW JONES TRANSPORTATION INDEX: the low on this index was formed before the Industrial average was 45.59 on 10/29/1896. when we go back into such long time frames we need to let the charts check the validity of this node in time/space. Using this low of 45.59 we find that it held the .382 retracement of the 1987 crash, the .5 retracement of the 2000-2003 low and the .618 (exact OBTW) retracement of 2007-2009. additionally, as shown by the orange arrows, the “thunderbolt” or “ab=cd” move was exact in resistance at 5537 in 2010 and almost the cause of the 2007 top. W/ those as our reference points, I believe we can objectively say that we have a good “node” to work from …

the purple arrows are “basic” measured move projections that smack right into an extension pattern in/around 7600. Additionally, the lighter blue arrows come in around 7535 on the index. I expect those to be MAJOR resistance areas if not the TOP. At a minimum, an expectation of a 3500 point decline from those areas (simply the size of the last one) is to be expected.

if we take a look a current levels – 7211 close (and note, closed at the highs) – then another 300 point move or, roughly, 4 percent move isn’t out the question. expect higher next week into this area of EXTREME resistance.

DJ Transports ... 1896-2013 — DJ Transports … 1896-2013

DOW JONES UTILITY AVERAGE: the Utilities Average has a sell pattern appearing a little higher after a very big monthly sell signal. while the pattern from the all time low in 1942 is still alive, it will be extremely important to watch this SELL pattern coming into play. If we fail at this SELL pattern then an attack of the “still alive” target up around 570 could be a reality. either the SELL pattern or the “still alive” will/should stop it in it’s tracks …

DOW JONES INDUSTRIAL AVERAGE: back before posting, JC Parets allowed me to “guest post” (thanks) on his site using the all time low on the DOW and our former 2007 top. (http://allstarcharts.com/the-math-behind-historic-dow-charts/) that level was, essentially 15,300 and the DJIA has been bouncing in/around that level for almost 6 months. that is what THE long term .618 price projection should do – if not be a top or bottom. but, last week, it gave away and the DJIA took off. folks, what we potentially have here is a 5 point reverse way pattern on a monthly basis. IF CORRECT, the bearish implications are very powerful. trend line resistance exists a little higher, we have a 1.27 extension pattern at 16,308 and the “top of the circle” at 16,827. I know the “top of the circle” will have people scratching their heads but LOOK at what the bottom of the circle did the last time we were EXTREME in bearish emotion (2009). It, basically, nailed the bottom. Would seem natural that the top would do the same…correct?

Bart out …

the upcoming week of 9/22 for the S&P

our S&P post last week of parts I-V spelled out the overall look and feel for the S&P as we approached and eclipsed new highs … we took a look at technology, financials and energy. additionally, throughout the past weeks, we have walked thru the circle of life for fixed income, the dollar and certain commodities. Additionally, we looked – globally – at the current state of affairs for the other equity indexes. this blog post will be a quick update to where I “think” we are and some key levels to watch over the next week …

Financials: a pattern did complete at the high for XLF at 20.92. Higher targets also remain from 21.50-22.20. Would really like those “higher” targets to be attacked to get a true feel of the market but, for now, realize 20.92 could be it on the financials. if this is complete, then it does not spell “good” for the overall index.
Energy: as we showed in the last post a potential terminal target remains higher in around 97 on the XLE. However, we also showed at pattern completing in/around 85.20. that has hit and a break below 80 (weekly close below) would not spell “good” for the overall index. Crude sold off on Friday and the real test will be it’s “return to the top of the triangle trendline” to see if it bounces for the higher target shown in the past. the $XOI and $OSX are also showing weakness at targets described in the past.
Technology: I am breaking down the overall technology look into the NASDAQ index (NAZZIE). if you look back at the “technology” post from last weekend you’ll see that we still have some higher targets 30+ points away. Too early to tell if Friday was a high but would, again, certainly like the upper targets to get hit and for all three of the major components of the S&P to go down together.
I still feel that the “big guys” are going to “tip” their hand and “try” to rotate out of the high flyers and into the staples (deodorant, tooth paste, water, etc.). I am watching this ratio like a hawk. This is a perfect set-up for a BUY of the ratio which sets up a (HISTORICALLY) SELL on the S&P. That target is a little lower and, again, would really like to see that level hit/targeted.
XLP / $SPX ratio analysis

Last, I had the WONDERFUL chance to train w/ Joe Dinnapoli of http://www.fibtrader.com a couple years ago. Wonderful training and very very important information on the “internals” of the market and it’s structure and the importance of liquidity in the world of program trading, micro trading, the bid-ask and the false injections of cash that has occurred w/in the house of cards this market has produced. Take the time to watch this series of videos: http://www.youtube.com/watch?v=MQed-Aqay5w I also ask you to take a look at the picture/explanation in part 2 of 5 and in/around 10:38 and 13:01 for part 4 of 5. The series is a couple years old, but still so extremely valid and important. If you read my post a couple hours prior to the FED announcement you’ll find that I correctly surmised that the QE would continue … believe it or not, sooner or later, the illiquid nature of todays market will, ultimately, put us at risk for a potentially major move. This is ONLY a probability and one that has, more than likely, a low chance of ever happening. But education around potentialities isn’t so bad, is it?

I AM NOT DESIRING OR CALLING FOR A CRASH OR ANYTHING LIKE THAT …however, the market has been propped up by trillions of dollars and, therefore, liquidity is an issue. If this is an issue then why not put some of the profits in the bank and let some or a little ride?

What if this DJIA chart is correct …. ?

DJIA SELL pattern completed/completing w/ potential targets depicted base on the lack of liquidity present in the market

Tag: $DJIA

Targets a plenty ….

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DJIA 1.618 Extension Target from 2007 HIT … just saying.

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lot’s of cool math, music and square roots – the NASDAQ getting ready to run?

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“I think this is a song of hope …” Robert Plant Live Stairway to Heaven

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Swing Low, Sweet Chariot ….

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around the world update … part II

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Equal Octave Scale of Music and the DJIA …

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the DOW components, in charts

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Aristotle, Diogenes Laërtius and the Dow Jones

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the upcoming week of 9/22 for the S&P

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