On 10/8 the Dow 70-year chart below was posted, suggesting stiff resistance should come in around 11,500. (see post here)
CLICK ON CHART TO ENLARGE
Below is an update to the above chart. The Dow reached 11,451 on 11/5 and has backed away from resistance.
CLICK ON CHART TO ENLARGE
Almost 2 months have gone by since the last 70-year update. With todays action, not included in the bottom chart, the Dow finds itself within 50 points of where it was almost 60 days ago.
At the time of the prior post, Dow 11,000 was resistance, now it becomes short-term support after almost touching Dow 11,500!
We’re there – 11,500.
Hey Captain…Good eyes, it could be! Ideal H&S patterns are when the left and right shoulder are about the same distance from the head. If this is a right shoulder, it is much closer to the head than the left shoulder.
So anything is possible, yet not ideal.
Tom…The long-term Dow chart is one of my favorites over the past 15 years. IMHO, it creates quality perspective of when to lighten up on positions and when to scale into the markets when low. These resistance lines are very strong. I love baseball and when at the plate, the batter doesn’t have to swing at every pitch…investment terms, we don’t always have to have a position or take a swing. This is one of those ranges around 5-6%, between Dow 11,000-11,500 that I am of the opinion we can set back and relax and see what happens!
Chris,
Thanks for the update on the Dow. Looks like a declining triangle has formed. Any comment on the probability of the breakout, up or down?
Cheers,
Tom
gee could that be a massive head & shoulder in the making?
Chris,
Have you ever read Dow 36,000? The authors were obviously not technicians.