The monthly Dow index is dominated by divergence, thus indicating the direction of the market, the same was in February during the covid-19 expansion (the market anticipates this a few months before and do not understand how it did so). With the formation of the divergence against covid-19, it began on September 04, 2018 (dark red) (blue line on January 2, 2018) and ended on December 02, 2019, it caused significant damage to the market along with the covid-19 pandemic. But the bears divergence was replaced by a bull that started on January 4, 2016 and ended on March 02, 2020. And the bull divergence was much longer and the market went much higher. And this new divide divergence, which began on January 2, 2018 (dark blue line) and may end in the second half of this year.
I think after this long bull market there will be a pretty strong market depreciation later this year, and definitely stronger as it was a couple of weeks ago.
But as I mentioned, if rsi rise above 93.09, otherwise there will be bears divergence and the Dow index will fall, thus starting to collapse the market.
From a technical analysis point of view, everything is very simple and basic. But it is a powerful tool that makes a big impact on the market.
If you have anything to add, write it in the comments.
I think after this long bull market there will be a pretty strong market depreciation later this year, and definitely stronger as it was a couple of weeks ago.
But as I mentioned, if rsi rise above 93.09, otherwise there will be bears divergence and the Dow index will fall, thus starting to collapse the market.
From a technical analysis point of view, everything is very simple and basic. But it is a powerful tool that makes a big impact on the market.
If you have anything to add, write it in the comments.
Note
Divergence may occur faster if RSI does not rise above 77.27 and falls below this level, because divergence may begin from September 04, 2018 and end in few months.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.