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The Dow remains inside of a fairly clean rising channel that has been in place for a few decades. The rally of late now has it back to the top of this long-term rising channel.
At the same time the Dow is at the top of its channel, one can’t help but notice the potential that a rising wedge looks to be forming, that would suggest a two-thirds chances of lower prices on the Dow.
The Dow is in somewhat of a jam at (1) in the chart above, reflecting that something needs to give (breakout or breakdown) fairly soon!
@Immoral_Capitalist_Tool: Of course a channel drawn on a log scale disappears on an arithmetic scale. The opposite is true as well. Well, duh! This simple mathematical truth neither supports nor undermines the validity of any particular channel. Only if the period is so short that the movements are small on a percentage basis will channels appear (nearly) identical.
For a chart covering decades, arithmetic scales are never relevant. They give the same weight to a 100 point move in the DOW from 40 to 140 as from 13000 to 13100, a clear absurdity.
Your remark “keep the little green ones in the water a little longer” seems a bit illogical as a response here. His bottom line point, seen only on a log chart, not an arithmetic chart, is that we have a 2/3rds chance that the DOW will fall from here; that we should “all get out of the water”. It is the arithmetic chart that seems to imply exponential growth forever, “keeping the little ones in the water”.
That channel kind of vanishes on the non-log chart, and the ephemeral rising wedge shows up nice and clear.
But do keep showing the muppets the log version. It helps keeps the little green ones in the water a little longer while the rest of the ingredients for the bisque are prepared..
At the same time the DOW is very near a cross of the 50month and 200month moving averages. Do MA crosses over that long of a period even matter if no one is watching it? By no one I mean the traders.