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Dowtheory

GBPNZD: Instant Entry on Strong Bearish Trend with DOW Theory📉 Overview: GBPNZD is currently in a robust bearish trend, offering traders an immediate entry opportunity. Our analysis, grounded in DOW Theory, underscores the strength of the downward movement. 📊 Technical Analysis: DOW Theory principles highlight a consistent pattern of lower lows and lower highs, affirming the prevailing bearish trajectory. 📈 RSI Confirmation: RSI shows no bullish divergence, reinforcing the sustainability of the bearish trend. 🎯 Trade Strategy: Proposing an instant entry aligned with the bearish trend, traders can set predefined targets for potential profits. 🛑 Risk Management: Implementing strategic stop-loss orders is crucial to manage risks and safeguard capital. 📉 Conclusion: GBPNZD presents a compelling opportunity for traders to capitalize on the strong bearish trend. Confidence is derived from the synergy of DOW Theory and RSI analysis. Caution, risk management, and close monitoring are advised.
Short
by miansarimhameed
SPY: Don’t “Guess” the Top.We can learn a very interesting lesson by looking at the SPY chart. Anyone who tries to guess the next top or bottom is a gambler, not a trader, and as someone who has gambled a lot in the past, this rally brings back some memories. It's very easy for someone to see such an explosive movement and think: "It's already gone up a lot, it's going to have to come down soon". It's very easy to look for clues in other indicators, for example, and get excited when you see the RSI exploding close to 70. Looking for clues that reinforce a pre-existing belief is common among individuals corrupted by the "confirmation bias", which is something else, and would be content for a future article. Still talking about the RSI, it's important to mention that the RSI was already at 70 when the price was at $450. Since then it has risen by more than $20 (approximately 5%), and there is no sign of a top yet. Far from being a criticism of such an efficient indicator, this is just evidence that the use of indicators should be aligned with what we see on the chart. Top or bottom signals are confirmed when we see a clear breakout from a notorious reversal pattern. As we can see from the SPY chart below, just one or two bearish patterns, even when appears close to clear resistance, is not enough. There needs to be confirmation of a good breakout. Perhaps this is one of the reasons why so many are rushing to sell a possible top, even without confirmation. By waiting for confirmation, you sacrifice part of your profits, and amateurs hate that. To feel like a pro, you have to feel the satisfaction of buying the bottom and selling the top, all the time. Which is ironic, because that's not the focus of a professional. A real trader seeks long-term consistency. Speaking for myself, as far as I can see it's a strong rally in the SPY, and the next resistance is the all-time high at $479.98. So far, there is no clear reversal pattern for me, although I personally would like to see a correction to a support point. What if the SPY made a bearish candlestick pattern today? Just as we see on November 9, 15 and 29, and on December 6, a top signal is plausible, but we need to wait for confirmation via a breakout. Otherwise, it would just be another bear trap. Another thing I like to do is wait for a clear bearish reversal structure to appear on shorter time frames, such as the hourly chart. Uptrends are characterized by rising tops and bottoms, and the reverse applies to downtrends. When a stock is in a clear uptrend, but the hourly chart suddenly makes a lower top and bottom, it's a warning sign. If such a reversal occurs near a resistance area, all the better, as was the case with NVDA at the end of last month. One of the most overlooked principles of Dow Theory is the number 6: "Trends Persist Until a Clear Reversal Occurs". When Charles Dow, founder of the Dow Jones index and the Wall Street Journal, began working on the principles more than a century ago, he never imagined that in the 21st century there would still be traders who anticipate and don't wait for confirmation (again, I was among these gamblers in the past). Therefore, trading reversals is interesting and can be very profitable, but you need to base your decisions on technical reasons. I shared how I like to trade reversals, but there are more strategies that you can use. Feel free to share yours. That's the difference between a gambler and a trader. Moreover, remember to follow me for more content like this, and support this idea if you liked it! All the best, Nathan.
AMEX:SPYEducation
by Nathan_The_Finance_Hydra
9
APE/USDT 1D. Idea. Huge pump soon. Explanation of the chart.Hi everyone. Been out for a while, there's a reason for that. Market consolidating, no need to update much. Now we're on the verge of the beginning of the somewhat altseason. So now is the time to update. Let's make a small remark, Others.d chart(capitalization of top 150 altrcoins) has pumped 20% today, huge sign for altseason. Now let's dive into this coin APE. There's a big Pump group in this token hence a movement is expected. There's 3 types of trend as for the DOW theory. Main trend, Secondary trend, local One. Let's analyze this chart with this trend theory. The main trend(here's not the all history of the coin) - Downtrend, shown as red on the chart. Secondary trend - downtrend channel. Local trend - falling wedge, where the resistance confluences with the main downtrend. Right now we're staying near under the support of the downtrend channel - here's also the support of the broken down local falling wedge. It's called a confluence of 2 zones - better seen on chart, where 2 levels become as one point. We've broken down the downtrend channel(it's called a deviation). Consolidated there for 66 days. It's a good sign for the future pump, because paperhands are thrown out of market(no understanding of market cycles -> leaving the market). As soon as we break this confluence zone up and got back into the channel - a potential to the resistance of the channel is opened. It's about 133% which is shown also on the chart. After we got into the channel - only main downtrend line which is also the resistance on the wedge will hold us. When we break this one - free road to the resistance of the channel is opened. This is about 4.8$ zone. Now notice that we've reached the 1.6$ zone, which is often the bottom zone for the crypto assets. The easiest example is Bitcoin at 16666$ zone and then the reversal, but u can find tons of such example if u look into it(one that comes right now to my mind is UMA - pump from 1.6$ zone, another one is T coin(T/USDT) - accumulation in 1.6$ zone in the beginning of 2023 then pump 400% something like that). I write a lot about it in my ru Channel, but now i share it here also. This is not the typical stuff u will hear from traders, and u may think it's foolish when u first look at it, but it works and u may check this out for ur self. Maybe later i will share why it works. But the main thing it works. Also notice that 16x3 is 48 whish is the target for this coin. 48 has it's numerological meaning. This how the magic of numbers works. Don't think about it, just feel it and use it for better understanding. Capitalization of the coin is 777m$ as for the august 14th. x2.5 pump is about 2b$ which is not that much, so can be realized. On the daily chart we also have the bullish divergence(triple(3)) on the RSI, this may be used as the addition to the all aforementioned. Consider the price moves with the market, so don't expect it to pump alone tomorrow for 130%. It takes some time.
Long
by TradingTsar
#DXY Possible scenarioHello, traders. Let's take a look at the DXY chart and discuss the possible movements of this chart for the next couple of days. As we know, the price recently broke below an important bullish channel for the first time since July 4th when this major bullish run began. However, as you can see, it failed to break below the previous low, which has been identified as an important support level. Based on Dow theory, the bullish trend is still intact since we have not violated the most recent lower low. So, we currently have two conflicting signals. One is bearish due to the breakdown of the long-term bullish channel, while the other is bullish because the price hasn't breached the last low. Furthermore, following the rejection of the low, the price moved higher impulsively, suggesting that buyers are still active. This is another bullish indication. However, the formation of a descending triangle chart pattern, which is bearish in nature, provides a mixed signal. For trading and as a personal opinion, the current price area may not be the best entry point into the market. Additionally, any upside breakout of the triangle chart pattern could potentially be a false breakout and may not be an optimal trading opportunity. However, if the price retraces lower to test the previous low and fails to break below it, we might consider taking a long position on the US dollar. If you've found this analysis helpful, please take a moment to like, comment, or share your thoughts with me.
TVC:DXYLong
by mohemati
3
S&P Double TopHistory and Introduction Everyone in the market today remembers broadly the financial response to C19. It We see it every time that we look at the price chart and we see the spike down and the V recovery. What a lot of people may not remember is the investigation into SoftBank for essentially causing a short squeeze by use of call options and gamma hedging. When that news story came out my long term assumption was we would be returning to the C19 low and that has informed every idea I have put out since then. News story www.investmentwatchblog.com An Explain Like I am 5 From Reddit When you write a call as a seller you essentially take a short position against the stock delta wise When SoftBank bought loads of calls that were out of the money then the writers had large negative delta positions against these tech stocks. One common way to offset a negative delta is you can hedge with owning shares to offset the negative position from the calls you write. As the calls were heavily wrote then shares were added to offset risk which contributed towards momentum. As the stock positions were entered it drove up price of stock which put those out of the money options closer to the money leading to more share purchases while SoftBank continued to purchase more and more calls leading to an increased share price between delta hedging and general market momentum. Someone can correct me if I’m off but that’s my broad description www.reddit.com Essentially when that news story came out I, personally, understood all these gains were unsustainable and were going to be given back. This was in addition to all of the other stimulus spending that was going on. There was still gains to be made or lost speculating in swing trading but my ultimate goal was to not buy the top and not to sell bottoms. Main Chart Analysis The main chart has been left pretty simple. We have the Gaussian Channel on top and we can see that in the 70s there were two points in time investors or traders got to buy below the gaussian channel. Fortunes could be made by buying below the channel and merely selling above the guassian channel. Loading up on dividend stocks would have also been very prudent. We can also see the opportunity came again in the 2000s. We can also see in purple the tops where the ADX has been at 20 or below. The 70s dip had the low ADX but the 2000s did not. It is not a necessary condition that the ADX be low for price to go below the gaussian channel, but it is suggestive that with the current low monthly ADX we have a fair shot of getting there. We also see that similar to the 1970s the ADX has been declining over each high for over the last decade. Not a good set of circumstances to be in. The right side of the chart shows the double top itself without any indicators and on the weekly time frame. As it stands right now it looks like a “lower high” double top but price could rally up 17% from the current level and this idea is still valid. The last top took over 300 days to develop and start to sell off to create the valley low. We can still have a significant amount of sideways as bulls get exhausted. Double Tops Double tops are suppose to have a flat base before the uptrend begins and then return to the flat base per Bulkowski, who is broadly considered to have written one of the modern trading “bibles.” www.thepatternsite.com The chart below shows what I consider the flat base to be. The fib draw on the double top does get us right into that range. Another thing to remember is that we don’t need to see an impulse that looks strait down. It is quite probable that price action takes out the valley low and then rally to test previous support as resistance. Here is an example of a double top on bitcoin from the 2018 bear market. The 4-hour chart provides the detail of a double top that developed over 25 days from the time the began to top to rejection oat previous support. So, not only could price action go sideways for some 300 days as the second half of the double top is created, but once price sells off we could spend considerable time in a suckers rally as price returns to previous support and tests it as resistance. Quarter Chart Long term, we have a chance to buy in the quarterly gaussian channel. This would require significant sidewise-ish or channel-ish price action for a decade. Dow Theory Basic Dow theory on bull markets has three phases, accumulation (smart money), public participation, and excess. From there we enter distribution, public participation, and panic. One tenant of Dow theory is indices must confirm one another. www.investopedia.com My linked idea will show that I thought that NDX would have a bull trap. That idea has been invalidated because rather than forming a classic bull trap NDX is likewise in a double top. But having both NDX and SPX in a topping formation suggests that we are in distribution. Since we are talking about Dow theory lets look at the DJI. T Guess what? he Dow looks like it is in a double top as well. Having all three indices appear to be topping within 5 percent of previous ATH is pretty bad. NASDAQ/S&P Since the Nasdaq is more volatile than the S&P we can look for bearishness in the NDX/SPX pair to see broader bearishness in the market. I am personally staying away from the Nasdaq as an investment as possible until it reaches its own double top target against the S&P. Crypto Assets Since I believe the SPX is a index that could be topping for over 300 days and having several consolidations on the way down I would expect some assts to go crazy as investors rotate and individual assets have blow off tops. I expect some massive rallies with some select cryptos and then a lot of despair. A lot of movement can happen in crypto over the lifespan of this idea. Here is bitcoin. What is the traditional target of a rising wedge? The beginning of the wedge. And there is no guarantee that bitcoin will set a higher high. If it does I am selling and probably never returning. Conclusion As someone who thinks the United States have been off sound money since the creation of the Federal Reserve I see all of this as the consequences of late-stage socialism. Subsidies to support government initiatives, transfer payments, bloated public services, debasement of the money supply all lead to public excess in the stock market. The United States as been more resilient than a lot of other countries in warding off the pernicious influence of socialist actors but once the Federal Reserve was created the ultimate conclusion was clear, it was just a matter of timing. Of course, due to inherent theory and model failure of most socialists they don’t realize it is the socialist policies that got the market here. Just like most don’t realize we are in distribution. The distribution phase can take a long time and I expect to be ignoring a lot of news. It’s a distraction. I am going to make the trades and investments as I see them. The main chart focuses on what happened to the SPX in two bear markets, one in the 70s and another in the 2000s. What happened to sound money (precious metals) in the 70s and 2000? Quite simply they went crazy. What happened to the Gold/SPX ratio? They reached muti-decades lows. If the SPX is topping then I would expect to see a massive upside pattern on gold. And I do. There is a cup and handle or ascending triangle. Based on that the time for me to rotate back into the S&P generally would be when the SPX/Gold ratio hits a double bottom from the low of 2011 Likewise with Silver and the S&P I think it is a decent time to take my kids to the precious metals store.
Editors' picks
SP:SPXShort
by This_Guhy
17
Macro Monday 17~Bear Market Confirmed? Macro Monday 17 The Dow Theory Confirms Bear Market Today’s post may be thee most important Macro Monday of 2023 as it may be a key moment where we received technical confirmation of a change to a bear trend. What’s Got Me Rustled? Manuel Blay, the lead economist and editor from the Dow Theory has recently confirmed an S&P500 bear trend change to his subscribers. Why is this so important? Historically, the Dow Theory has provided some of the best signals for market participants. From 1920 to 1975 the Dow Theory signals captured 68% of the moves in the Industrial & Transportation Averages and 67% of those in the S&P 500 Composite Index. Over recent years I have been keeping an eye on The Dow Theory’s predictions and they were one of the few who signalled a warning in early 2001 before the Dot.Com Crash in Sept 2001, and they signalled a warning prior to March 2020 COVID-19 Crash. They were also one of the few who turned bullish on the market from November 2022 when bears were out in their droves. The Dow Theory has a proven track record of outperforming the stock market with significant drawdown reduction (less skin in the game during downturn periods). The Dow Theory is one thee most top ranked investment letters and people will pay very close attention to this recent release by Manuel Blay. What is Dow Theory and How Does It Work? There are many elements to the Dow Theory and I am going to try and explain some of the basics with the help of some charts. In basic terms the Dow Theory is a technical framework that predicts when the market is in an upward trend if one of its averages (Such as Dow Jones Transportation Average) advances above a previous important high, accompanied or followed by a similar advance in another corresponding average (such as Dow Jones Industrial Average). The theory is predicated on the notion that the market discounts everything, consistent with the Efficient Market Hypothesis. Efficient Market Hypothesis is something I live by, it is the hypothesis that states that share prices reflect all information, price being the aggregation of everything that’s happening. Price over everything, over the news and any other outside factors. Consistent alpha generation is possible focusing only on price. This hypothesis chants “the market knows best” or “trust the intelligence of the market/price”). The Dow Theory uses a combination of markets to help achieve agreement for the overall market trend using price. In such a paradigm, different market indices must confirm each other in terms of price action and volume patterns until trends reverse. This means that one chart can lead another. It also means that if multiple charts are confirming a particular trend, this adds weight to the probability that that the new price direction is the new trend. This is important to understand as today we will see that out of the four most common charts used by the Dow Theory, three of them are confirming the bear trend and the fourth is leaning bearish (the final confirmation outstanding). “The Dow Theory for the 21st Century” by Jack Schannep should be your go for a more detailed understanding of the Dow Theory or visit the TheDowTheory.com and become a subscriber. The Bearish Signals are here As noted above the Dow Theory mainly focuses on the price movements of four major market indices all of which we will individually cover on today’s Macro Monday: 1. S&P500 – Three Bearish Signals 2. Dow Jones Industrial Average Index – Three Bearish Signals 3. Dow Jones Transportation Average Index – Three Bearish Signals 4. NYSE Arca Major Markets Index – Two Bearish Signals (one pending) S&P500 - SP:SPX The price and price structure on the S&P500 chart has provided us with 3 key bearish confirmations (see Chart 1 Above) Dow Jones Industrial Average Index - TVC:DJI The DJI is significantly more bearish than the S&P500 as it failed to make a new high since its high in Jan 2022 whilst the S&P500 broke to new highs in July 2023. We could consider this as a negative divergence with the DJI providing us an advance warning due to its failure to establish a new high in July 2023, instead it confirmed a lower high. The price and price structure on the TVC:DJI Chart has provided us with 3 key bearish confirmations also (see Chart 2 Below). Dow Jones Transportation Average Index - DJ:DJT Similar to the Dow Jones Industrial Average (DJI), the DJT also confirmed a lower high in July 2023 compounding the bearish signal already observed in the DJI. These could also be considered double tops with a lower high for the latter two. The price and price structure on the TVC:DJI Chart has provided us with 3 key bearish confirmations also (see Chart 3 Below). NYSE Arca Major Markets Index - TVC:XMI Similar to the S&P500 the XMI chart made a higher high in July 2023 however this was a false break out followed by a throw over with price then falling through the 21 week moving average. The price and price structure on the TVC:XMI Chart has provided us with 2 key bearish confirmations with the third pending confirmation, however with the 21 week moving average sloping downwards and with the three other charts above already having breached the diagonal resistance line, it is highly probable that the XMI will follow suit and breach its diagonal support line (see Chart 4 Below). As you can see all charts are strongly suggesting that we have started to turn into bearish trend and all have an heir of a double top pattern. To be clear, this is using the Dow Theory approach which historically has been very effective at getting us on the right side of probability but there are no guarantees, there are times the Dow Theory has been completely wrong. Given that three of the charts are in complete agreement with the fourth looking liking to confirm a similar bearish path, probability strongly in the favour of the bears. For those who appreciate this theory they would now start to make some changes to their portfolios to protect themselves from a drawdown event, as noted in the introduction protection from drawdown events is where The Dow Theory really shines. The Halloween Effect might fool us all The Halloween effect on the markets is based on the historical tendency for the stock market to perform better between Halloween Oct and May Day (the "winter" months) than in the other six months of the year ("summer" months). It closely related to the oft-repeated advice to sell in May and go away. In particular the months of Oct – Dec are some of the best return months impacted by the Halloween effect. I will follow up with a chart in the comments that illustrate the % return of the Halloween effect versus the summer months. In the past the Dow Theory and other market indicators have provided confirmation of a bear trend and the market has made higher highs thereafter only to be thrown over into a longer bear market many months later confirming the original bear trend thesis. The point being is that it is probable we are going to see some impact from the Halloween Effect and this could in fact press prices higher in the short term, and in some cases we can even make higher highs. We need to be extremely cautious if we make reasonable progress during the Halloween Effect period, perhaps this could be seen as an opportunity to take some profits and de-risk some of your portfolio. I have covered the XMI, DJT, XMI and DJI charts in detail previously on Tradingview and here. Please review them if you would like to get more familiar with their components and historical performance. As always folks, stay nimble in this market and reduce risk where possible PUKA
SP:SPX
by PukaCharts
2
EURUSD Get ready Weekly Short chanceWondering ... FOMC and ECB near future decisions of interest rate. USA has more likely to see continue of rising inflations due to strong economic announcements. fed has to stop it by raising interest rate higher again. Balance between slowing economy vs unemployed ..Slow will help gas price to come down... E.U... showing slowing of economy...Germany , Italy ,Spain....last one to follow France .. Monthly and Weekly has showing strong selling charts, follow the trend !!
by nmiko