A better model for my idea. More detail in chart; DJIA piercing the top of triangle 5-09 does not constitute breakout; low volume, weak RSI. It's a bull trap.
The downtrend is definite and clearly established now, with 4 lower highs over past 3 months and 3 retests of the support base of descending triangle.
Bulls are weary and the bull run is ten years old. Fundamentals are good, but these have been discounted and prices are still too high.
This is a real bear, following a real bull that lasted for ten years, not just a price correction. The bear will likely last for nine months. Big bulls beget big bears!
When the downtrend continues there will be a series of successive declines with upwards reactions, but the current support levels at 23600 and 22800 will become resistance, so-called "Support inversion"; We already saw this happen at DJIA 24800 and it's happening again at 24500 - previous support becomes future resistance.
Some contributors here have suggested the correction could be entering final phase and hope for breakout to the upside.
Low up-wave volume and weak RSI are inconsistent with this idea. When the bulls return it will be on powerful price action and very high buy volume. Not seeing it now.
Recovery will most likely occur around DJIA 21000 at S3 reaching back to May 2017, where the downtrend intersects the long uptrend reaching back to 2010, resuming the steady 6% growth in equities which they return historically. With T-bills at 3% now the risk in equities outweighs any short-term upside reward. Investors are rightly skittish.
Short the Great Bear; Buy in November when blood runs in the streets!
The downtrend is definite and clearly established now, with 4 lower highs over past 3 months and 3 retests of the support base of descending triangle.
Bulls are weary and the bull run is ten years old. Fundamentals are good, but these have been discounted and prices are still too high.
This is a real bear, following a real bull that lasted for ten years, not just a price correction. The bear will likely last for nine months. Big bulls beget big bears!
When the downtrend continues there will be a series of successive declines with upwards reactions, but the current support levels at 23600 and 22800 will become resistance, so-called "Support inversion"; We already saw this happen at DJIA 24800 and it's happening again at 24500 - previous support becomes future resistance.
Some contributors here have suggested the correction could be entering final phase and hope for breakout to the upside.
Low up-wave volume and weak RSI are inconsistent with this idea. When the bulls return it will be on powerful price action and very high buy volume. Not seeing it now.
Recovery will most likely occur around DJIA 21000 at S3 reaching back to May 2017, where the downtrend intersects the long uptrend reaching back to 2010, resuming the steady 6% growth in equities which they return historically. With T-bills at 3% now the risk in equities outweighs any short-term upside reward. Investors are rightly skittish.
Short the Great Bear; Buy in November when blood runs in the streets!